22. The long-run average total cost curve: a. displays declining unit costs so long as output is increasing. b. indicates the lowest unit costs achievable when a firm has had sufficient time to alter plant size. c. has a shape which is the inverse of the law of diminishing returns. d. can be derived by summing horizontally the average total cost curves of all firms in an industry. 23. If a firm increases all of its inputs by 10 percent and its output increases by 15 percent, then: a. it is encountering diseconomies of scale. b. it is encountering economies of scale. c. the law of diminishing returns is taking hold. d. the firm's long-run ATC curve will be rising.
22. The long-run average total cost curve: a. displays declining unit costs so long as output is increasing. b. indicates the lowest unit costs achievable when a firm has had sufficient time to alter plant size. c. has a shape which is the inverse of the law of diminishing returns. d. can be derived by summing horizontally the average total cost curves of all firms in an industry. 23. If a firm increases all of its inputs by 10 percent and its output increases by 15 percent, then: a. it is encountering diseconomies of scale. b. it is encountering economies of scale. c. the law of diminishing returns is taking hold. d. the firm's long-run ATC curve will be rising.
Chapter1: Making Economics Decisions
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Transcribed Image Text:22. The long-run average total cost curve:
a. displays declining unit costs so long as output is increasing.
b. indicates the lowest unit costs achievable when a firm has had sufficient time to alter
plant size.
c. has a shape which is the inverse of the law of diminishing returns.
d. can be derived by summing horizontally the average total cost curves of all firms in an
industry.
23. If a firm increases all of its inputs by 10 percent and its output increases by 15
percent, then:
a. it is encountering diseconomies of scale.
b. it is encountering economies of scale.
c. the law of diminishing returns is taking hold.
d. the firm's long-run ATC curve will be rising.
24. If a firm increases all of its inputs by 10 percent and its output increases by 10 percent, then:
a. it is encountering diseconomies of scale.
b. it is encountering economies of scale.
c. it is encountering constant returns to scale.
d. the marginal products
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