QUESTION 1Not yet answeredMarked out of 1.00A firm trebles its inputs and discovers that its output rises by a factor of four. Assuming constant factor prices, thisimplies:Select one or more:O a.constant returns to scaleO b. diminishing returns to a variable factorO c.economies of scaleO d. increasing returns to scaleQUESTION 2Not yet answeredMarked out of 1.00Diseconomies of scale are present when..Select one or more:O a.total costs fall as output risesO b. total costs rise as output risesO c. long run average costs rise as output risesO d. marginal costs rise QUESTION 5Not yet answeredMarked out of 1.00In a competitive market with free entry and exit from the market a permanent rise in demand will lead toSelect one or more:O a.excess profits being made in the short run (before new firms can enter)O b. entry by new firmsO c.a permanent rise in pricesO d. normal profits being made in the long-runQUESTION 6Not yet answeredMarked out of 1.00Imagine a firm in a competitive market comes up with a new production method, which halves its marginal cost atall levels of Q. Fixed costs are unaffected. Which of the following statements are true?O a.The firm's AC at all levels of Q would be lower.O b. The firm would extract an innovation rent from selling at the market price with lower costs.O c.The firm's point of minimum AC would be a higher level of Q.O d. The innovation would immediately cause the market price to drop.

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A firm trebles its inputs and discovers that its output rises by a factor of four. Assuming constant factor prices, this implies: Select one or more: O a. constant returns to scale O b. diminishing returns to a variable factor O c. economies of scale O d. increasing returns to scale

A firm trebles its inputs and discovers that its output rises by a factor of four. Assuming constant factor prices, this implies: Select one or more: O a. constant returns to scale O b. diminishing returns to a variable factor O c. economies of scale O d. increasing returns to scale

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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QUESTION 8 Which of the following statements concerning the relationships between total product (TP), average product (AP), and marginal product (MP) is not correct? OC. TP reaches a maximum when the MP of the variable input becomes zero D. MP cuts AP at O A. AP reaches a maximum before TP reaches a maximum O B.AP continues to rise so long as TP is rising the maximum AP
Suppose a particular firm exhibits constant returns to scale as it increases its output over any reasonable range. If it increases its total costs by 10%, then its: O long run average cost curve will shift to the right by 10% O average total cost will increase by 10%%. O total cost will increase by less than 10%. O output will increase by 10%. 21 tv MacBook Pro 80 O00 FA FS F6 F7 F8 19
In the short run, if average variable costs equal $60, average total costs equal $70, and output equals 100, the total fixed costs should equal O $10. O $1,000. O $5,000. O $13,000.
d. Using the table below indicate which firm has (i) diseconomies of scale and (ii) constant returns to scale over the entire range of output. Explain your answer Quantity 1 (Units of output ) 2 4 5 7 Firm A 210 340 490 660 850 1060 1290 Firm B 180 350 510 660 800 930 1050 Firm C 120 250 390 540 700 870 1050 Firm D 150 300 450 600 750 900 1050 3.
Suppose there are fixed costs and the marginal costs are constant. Then we know that Select one: a. average variable costs decrease continuously as output increases and lie above the marginal cost curve. cross out O O b. average total costs decrease continuously as output increases but always lie above the average variable cost curve which is constant. cross out c. average total costs are constant. X d. average total costs decrease continuously as output increases and lies above the average variable cost curve which is also decreasing continuously as output increases. cross out cross out
Which of the following production functions exhibits increasing returns to scale? OA. AY=k1/2 1/2 O B. Y=K°L1-a O.Y=k1/3L 2/3 O D. Y=K1/2L 3/4 O E. Y=K1/3L 1/3
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If the long-run ATC decreases as the quantity of output increases, the firm is necessarily experiencing * economies of scale. constant returns to scale. O increasing returns to scale. O diminishing returns. O decreasing returns to scale.
The production function Q=0.8X+0.6Y exhibits A. increasing return to scale. OB. economies of scale. O C. decreasing returns to scale. O D. constant returns to scale.
4. The shape of a firm's long-run average cost curve depends o how costs vary with scale of operation. Draw a long-run average cost curve for a firm that exhibits economies of scale, constant returns to scale, and diseconomies of scale. Identify each of these sections of the cost curve and explain why each section exemplifies its specific type of return to scale.
When fixed costs are ignored because they are irrelevant to a business's production decision, they are called O explicit costs. O implicit costs. Osunk costs. O opportunity costs.
A firm doubles its inputs and discovers that its output has trebled. The prices of the inputs remain constant. This is an example of: Select one or more: Constant returns to scale. O a. O b. Increasing returns to scale. O C. Dis-economies of scale. O d. Economies of scale.