ch 11 HW
n economics, the short run is the time frame in which ______ and the long run is the period of time in which ______.
the quantities of some factors of production are fixed; the quantities of all factors of production can be varied
The long-run average cost curve is made up of the segments of individual average ______ cost curves with the lowest average ______ cost for a given output.
total; total
That law of diminishing returns states that as a firm uses more of a _______ factor eventually diminishes.
variable factor of production with a given quantity of the fixed factor of production, the marginal product of the variable
The long-run average cost curve is the relationship between the lowest attainable average total cost and output, when plant size is ______ and labor is ______.
varied; varied
The AFC curve has this shape because
when output increases, the firm spreads its total fixed cost over a larger output
When the price of milk increases, the TVC curve _____ and the TFC curve _____.
shifts upward; does not shift
When the price of milk increases, the AVC curve _____ and the MC curve _____.
shifts upward; shifts upward
When economies of scale are present, the LRAC curve ______. When diseconomies of scale are present, the LRAC curve ______.
slopes downward; slopes upward
A firm's minimum efficient scale is the _______.
smallest quantity of output at which long-run average cost reaches its lowest level
The past expenditure on a plant that has no resale value is called a _______ cost
sunk
The shape of the ATC curve arises because of _______.
the influence of two opposing forces--spreading total fixed cost over a larger output and eventually diminishing returns
he marginal cost curve eventually slopes upward because of _______.
the law of diminishing returns
A firm experiences constant returns to scale when _______.
average total cost does not change when output changes
Marginal product eventually diminishes because _______
more and more workers are using the same capital and working in the same space
Total product is the total _____ of a good produced in a given period
quantity
Average product is the total product divided by the _____
quantity of a factor of production
When the price of milk increases, the TC curve
shifts upward
Marginal product is the change in _____ product that results from a one-unit increase in the _____.
total; quantity of labor employe
Milk is a _______ factor of production in the production of lattes.
variable
______ are features of a firm's technology that lead to falling long-run average cost as output increases that arise because of _______.
Economies of scale; greater specialization of both labor and capital
Hiring more workers decreases the productivity of each additional worker.
example of diminishing marginal returns
The law of diminishing marginal returns states that as a firm uses more of a _____ factor of production with a given quantity of the _____ factor of production, the _____ product of the _____ factor eventually diminishes.
variable; fixed; marginal; variable
______ are features of a firm's technology that lead to rising long-run average cost as output increases that arise because of _______.
Diseconomies of scale; the challenge of managing a large enterprise
When average product exceeds marginal product, ______ product is decreasing.
average
The shape of the AVC curve arises because of _______.
increasing returns initially and eventually diminishing returns
When the price of milk increases, the AFC curve _____ and the ATC curve _____.
does not shift; shifts upward
When marginal product exceeds average product, ______ product is increasing.
average
The marginal cost curve slopes downward at low outputs because of _______.
greater specialization and division of labor
To increase output in the short run, a firm must _______. To increase output in the long run, a firm can _______.
increase the quantity of a variable factor of production; choose whether to change its plant as well as the quantity of labor it hires
