ECO100: Producers in the Long Run

Which of these costs are affected by the level of output produced?

variable costs

The relationship between the inputs used by the firm and the maximum output it can produce is known as the:

production function

__________ equals the firm's revenues minus all implicit and explicit costs.

Economic cost

__________ is the additional cost to the firm of producing one more unit of a good or service.

Marginal cost

Minimum efficient scale is the level of output at which:

all economies of scale have been exhausted

An investment, broadly defined in an economic sense, is:

any action that creates a cost today but is expected to provide benefits in the future

Goods used in an economic system for the production of other goods are known as:

capital

Information goods tend to have a __________ initial cost and a __________ marginal cost.

high; very small

The law of diminishing returns applies:

in the short run

In economics, productivity is defined as:

output produced per unit of some input

In the long run, firms faced with an increase in the price of an important input, can:

substitute away from that input

The very long run is when:

technology becomes variable

Which of the following is not a technological change?

Re-branding

In the long run, an increase in productivity by 2% per year may lead to:

100% more output in approximately 40 years (72/growth rate = how many years; 72/2 = 36 years)

Which of the following rights is given to the holder of a patent?

The exclusive right to a new product

The short run is a period of time where __________ , while the long run is a period of time where __________.

at least one input is fixed; all inputs are variable

A(n) __________ occurs when long-run average costs increase with output.

diseconomy of scale

The downward sloping part of the long-run average total cost curve is where the firm is achieving:

economies of scale

When a firm is able to lower long-run average costs by increasing output, it is known as:

economy of scale

Technological change can:

lead to a downward shift of the LRAC curve