Answer: The correct option is D. -4/5
Step-by-step explanation:
From the question above, we have:
Cost on input = $500
Wage rate = $20 per hour
Cost of capital = $25 per hour
The formula for slope of isocost is given as:
Slope of isocost = -(w/r)
Where,
W = wage rate
r = rental cost of capital.
Therefore, we have:
Slope of isocost curve = -(20/25)
= -0.8 or -4/5