Microeconomic November

Negative technology change is when

A firm must use more inputs to produce the same output

The law of diminishing states that

Adding more of a variable input to the same amount of a fixed input will eventually cause the marginal product of the variable input to decline

An example of technological change is

All of the above

For which of the following reasons may firms experience economies of scale

All of the above

In the initial stages of production, specialization and division of labor lead to an increasing marginal product of workers

Allowing workers to concentrate on a few tasks so that they become more skilled at doing them quickly and efficiently

How are implicit costs different from explicit costs?

An explicit cost is a cost that involves spending money, while an implicit cost is a nonmonetary cost.

A firm might experience economies of scale because

As a firm

Suppose a firms average total cost curve is decreasing with output. What can be said of its marginal cost curve? The firms marginal cost curve must be

Below the average total cost curve

How is price elasticity of demand measured?

By dividing the percentage change in the quantity demanded of a product by the percentage change in the product's price.

Economic of scale happen when the firms long run average total cost as our out increases

Decreases

What is the main reason that firms eventually encounter diseconomies of scale as they keep increasing the size of their store or factory

Firms have difficulty coordinating production.

What happens when the quantity is very responsive to changes in price? The percentage change in quantity demanded will be

Greater than the percentage change in price

What is the distinction between the economic short run and the economic long run

In the short run, at least one input is fixed, but in the long run, the firm can vary all inputs.

What is the difference between the short run and the long run

In the short run, at least one of a firm's inputs is fixed, while in the long run, a firm is able to vary all its inputs and adopt new technology.

When the marginal product of labor is greater than the average product labor, then the average product of labors must be

Increasing

Is it possible for technological change to be negative? If so, give an example

It is possible for technological change to be negative. An example is when a hurricane damages a firm's facilities

the marginal cost curve insect both the average variable cost and the average total cost curves at their (blank) points

Minimum

Is it possible for a firm to experience a technological change that would increase the marginal product while leaving the average product of labor unchanged

No. An increase in the marginal product of labor will increase the average product of labor

The income elasticity of demand for a normal good is and for an inferior good is

Positive;negative

The relationship between the inputs employed by a firm and the maximum output it can produce with those inputs is called the

Production function

What is the difference between technology and technological change

Technology is the process of using inputs to make output, while technological change is when a firm is able to produce the same output using fewer inputs

A short run production holds constant

The amount of capital

Which of the following terms to the lowest cost at which a firm is able to produce a given level of output in the long run, when no inputs are fixed

The long run average cost curve

Technology is

The processes a firm uses to turn inputs into outputs of goods and services

A training program makes a firms workers more healthy and productive

This is an example of positive technological change

A firm is able to cut each​ worker's wage rate by 10 percent and still produce the same level of output.

This is not an example of positive technological change

Firms often rely on market experiments to calculate the price elasticity of demand for a new product.

True

Which cost are affected by the level of output produced

Variable cost

Economics of scale occurs

When a firms long run average cost decrease with output

Disecomonies of scale

When a firms long run average cost increase with output

Which of the following is true of the relationship between the average product of labor and the marginal product of labor

Whenever the marginal product of labor is greater than the average product of​ labor, the average product of labor must be increasing.

An implicit cost is

a non-monetary opportunity cost

What is the difference in the short run and the long run? In the short run,

at least one of the firm's inputs is fixed, while in the long run, the firm is able to vary all its inputs, adopt new technology, and change the size of its physical plant

further, positive technological change is defined as

being able to produce more output using the same inputs being able to produce the same output using fewer inputs

Which of the following is most likely to a variable cost for a business firm

cost of shipping products

As the level of output increases, the difference between the value of average total cost and average variable cost

decreases because average fixed cost decreases as output increases.

Any cost that remains unchanged as output changes represents a​ firm's

fixed cost

A firms production function is best described as

illustrating the relationship between inputs and the maximum amounts of output that the firm can produce with these inputs.

Which of the following is most likely to be a fixed cost for a farmer

insurance premiums on property

If the income elasticity of SUVs is greater than 1 what is the good considered

luxury

When a positive technological change occurs

more output can be produced from the same inputs the same output can be produced with fewer inputs

Income Elasticity

percentage change in quantity demanded/percentage change in price

What is the formula for the price elasticity of demand

percentage change in quantity demanded/percentage change in price

For a normal good, the income elasticity of demand will be

positive, but for an inferior good, the income elasticity of demand will be negative

The law of diminishing returns applies

short run

To estimate the price elasticity of demand, economists need to know

the demand curve for a product

The production function is the relationship between

the inputs employed by a firm and the maximum output it can produce with those inputs.

cross-price elasticity of demand

the percentage change in the quantity demanded of one good divided by the percentage change in the price of another good

In economics, the best definition of technology is

the process a firm uses to turn inputs into outputs

What is the difference between total cost and variable cost in the long run? In the long run,

the total cost of production equals the variable cost of production.

Any cost that changes as output changes represents a​ firm's

variable cost