An isocost line is a line showing combinations of inputs that would yield the same cost. Therefore, the word isocost implies that the cost of the given factors of production are constant along the certain activity level and thus can be used for the planning and decision making purposes.
In the above figure, L denotes the amount of labor utilized by the producer and K denotes the amount of capital utilized by the producer. It is evident from the figure that along the line the cost of both of the factors of production is same and the total cost of production is also shown on the graph for different cost lines. With the help of isocost lines, most economic and cost beneficial decision can be made for getting the desired output. This graph also shows that isocost lines are the straight lines and the only different in them is that they shift up or down the graph showing the same pattern for different activity levels. These isocost lines are parallel because each reflects the same relative resource price.
Given a production function, an isoquant is "the locus of input combinations that yield the same output level." (Chiang, p. 360) There is an isoquant set for each possible output level. Mathematically the isoquant is a level curve of the production function.
Isoquants is a concept relating to the quantity of input required to produce a certain level of output. For a given level of output, there are certain levels of input of production factors that yield the same level of output. If the ratio of two or more of the factors of production is changed then the resulting yield of those input factors can be same for all of the combinations of factors. This implies that the concept of isoquant deals primarily with the cost minimization problems of producers.
The above figure shows different levels of labor and capital required to produce a certain output of a particular product and the curve shows that different combinations of input resources can be made to