In microeconomics, which term refers to the set of all possible combinations of two inputs that produce the same given level of output?

Introduction / Context:

This question belongs to microeconomics, specifically the theory of production. Firms combine two or more inputs, such as labour and capital, to obtain a certain level of output. Economists often represent these combinations graphically to study how firms can substitute one input for another while keeping output constant. The term that captures the idea of all input combinations that lead to the same level of output is very important for understanding producer behaviour and cost minimisation.

Given Data / Assumptions:

• We are analysing a firm that uses two inputs, for example labour and capital.
• The firm can vary these inputs in different proportions.
• All combinations being considered in the definition yield the same quantity of output.
• We are working within standard microeconomic theory, assuming well behaved production technology.

Concept / Approach:

In production theory, an isoquant is defined as the locus or curve showing all combinations of two inputs that produce a given level of output. The word iso means equal and quant refers to quantity of output. It is similar to an indifference curve in consumer theory, but instead of equal satisfaction, the isoquant represents equal output. The approach is to recall definitions of related concepts like isocost lines, production functions and average product, and then identify which one matches the description in the question.

Step-by-Step Solution:

Verification / Alternative check:

Standard microeconomics textbooks define an isoquant as a contour map of a production function, in which each curve represents one fixed level of output. Moving along the isoquant, the firm substitutes one input for another while remaining on the same output level. This confirms that the isoquant is exactly the set of combinations described. Other concepts in the options do not represent such a set, which helps verify the answer.

Why Other Options Are Wrong:

The isocost line shows all combinations of inputs that cost the same total amount of money, not the same output. The average product curve describes output per unit of a single input, not combinations of two inputs. The production function is a mathematical relation expressing maximum output for any combination of inputs, but it is not itself the set of equal output combinations. The indifference curve belongs to consumer theory and represents equal satisfaction levels, not producer output levels.

Common Pitfalls:

Candidates sometimes confuse isoquants with isocost lines because both involve combinations of inputs. Another common error is to think of the production function as a single curve rather than a broader concept. Some learners also mix up indifference curves and isoquants because of the similar graphical representation. Remembering that isoquant means equal quantity of output helps keep the concept clear.

Final Answer:

The set of all input combinations that produce the same level of output is called an Isoquant.