QUESTION 6 The basic difference between the short run and the long run is that O A. all costs are fixed in the short O B. the law of diminishing returns applies in the long O C. at least one resource is fixed in the short run, while all resources are variable in the long run O D. economies of scale may be present in the short run but not in run, but all costs are variable in the long run run but not in the short run the long run

QUESTION 6 The basic difference between the short run and the long run is that O A. all costs are fixed in the short O B. the law of diminishing returns applies in the long O C. at least one resource is fixed in the short run, while all resources are variable in the long run O D. economies of scale may be present in the short run but not in run, but all costs are variable in the long run run but not in the short run the long run

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 19 Assume short-run production. Select the statements that are true. O The marginal cost at a particular output level is the slope of a line from the origin to the corresponding point on the cost curve. Changes in fixed costs do not affect the shape or placement of the total cost curve. The average cost curve is everywhere above the average variable cost curve. The difference between the total cost and the total variable cost is a constant. 00000 The marginal cost is the slope of the total cost curve or the total variable cost curve... The "law of diminishing marginal returns" could also be termed the "law of increasing marginal costs" When total cost or total variable cost is increasing, there are increasing marginal returns to the variable input.
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 action would decrease per unit costs? O b. O a. Decreasing output when experiencing diseconomies of scale. Decreasing output when experiencing economies of scale. Increasing output when experiencing diseconomies of scale. O d. Increasing output when experiencing constant returns to scale. Oc.
4
Capital (K) Q= 100 Labor (L) The firm's optimization problem is to minimize total cost for a given level of output. In the diagram above, why is that achieved at point E rather than at point F? Select one: O a. Although E uses more labor than F, output is higher to compensate for increased costs. O b. Total costs are the same at Fand E, but the firm prefers the combination of inputs at E. O c. F uses more capital than E, and capital tends to be more expensive than labor. O d. Total costs at E are lower than at F because E is on a lower isocost line.
Using the appropriate diagram, show and explain the effect of the increase in income taxes on the equilibrium in the money market.
Q18
Bob produces candles. The average total cost reaches its minimum at a quantity O A. the same as the quantity at which the average variable cost reaches its minimum. O B. lower than the quantity at which the average variable cost reaches its minimum. O C. the same as the quantity at which the marginal cost is at a maximum. O D. the same as the quantity at which the marginal cost is at a minimum. O E. greater than the quantity at which the average variable cost reaches its minimum.
O Question 2 The average total cost curve is intersected at its minimum point by the average variable cost curve only. the marginal cost curve only. both the average variable cost curve and the marginal cost curve. neither the average variable cost curve or the marginal cost curve. T OL
Which of the following is always true? When marginal costs are less than average total costs, average total costs will be decreasing. When average fixed costs are falling, marginal costs must be less than average fixed costs. O When average fixed costs are rising, marginal costs must be greater than average total costs. When marginal costs are greater than average total costs, average total costs will be decreasing.
When a firm produces one unit, the variable cost is $7. When the firm produces two units, the variable cost is $10. When the firm produces three units, the variable cost is $12. What is the marginal cost associated with three units of production? Select one: O a. 3 O b. 7 O c. 2 O d. 0
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.