ch 11 HW

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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


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