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Curvature of the Iso-quant:
An iso-qunat is convex to the origin. This is so because as more and more units labour are employed, the producer would prefer to give up less and less of the other input to produce the same amount of output. This is shown in the following Figure:
For a rise in L from L1 to L2, the producer gives up K1 amount of K. For the same output level q, as L increases from L3 to L4, she gives up K2 amount of K. As K2 < K1, it implies that for more units of L, the producer is willing to give up less of K. A convex iso-quant implies a diminishing MRTSLK. As MRTSLK = MPi/MPk, a diminishing MRTS means as L increases, L MP decreases and MPK increases.
The Budget Line The line BB gives the persons budget constraint. It is described by the linear equation c + wl = w; which can be rewritten as c = w - wl: The budget li
Resilience in Addition to Strength: The BOP has been in overall surplus since 1996-97 with forex reserves rising, on an average, by $8.50 billion per annum during 1996-97 to 2
law
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