Ch 11 practice questions

which of the following is an example of a long run adjustment

Walmart build another supercenter

which of the following is a factor of production generally is fixed in the short run?

a factory building

a characteristic of a long run is

all inputs can be varied

why a firm experiences diseconomies of scale?

as the size of the firms increases it becomes more difficult to coordinate the operations of its manufacturing plants

All of the following are U-shape except one. Which curve is not U-shape? average TC curve average FC curve average VS curve marginal cost curve

average fixed cost curve

U-shape

average total cost curve average variable cost curve marginal cost curve

marginal product of labor equation

change in Q/ Change in L

marginal cost equals to the

change in total cost divided by the change in out put

a firms expansion path is a curve that shows a firms ___________ combination of inputs for every level of outputs, holding input prices ______________

cost-minimizing, constant

which of the following can a firm do in the long run but not in the short run?

decrease the size of its physical plant

if production displays economies of scales, the long-run average cost curve is

downward sloping

if, when a firm doubles all its inputs, its average cost of production decreases, then production displays

economies of scales

average cost of production

falls as long as output is increased

on an isoquant/ isocost graph, the least cost input combination of producing a given output is

given by the tangency between the isoquant curve and the isoquant line

which of the following explains why the marginal cost curve has a U shape?

initially, the marginal product of labor rises, the it fall

as isoquant shows the combinations of two _________ that yield the same ___________

inputs, total output

technological change

is a change in a firms ability to produce a given level of output with a given quantity of inputs

a firm has successfully adopted a positive technological change when

it can produce more outputs using the same inputs

diseconomies of scale apply only to the

long run

which of the following is true at the output level where average total cost is at minimum?

marginal cost = average total cost

in the short run, if marginal product is at its maximum, then

marginal cost is at it minimum

implicit cost can be defined as

non monetary / own resources

which of the following describes how output changes in the short run? because of specialization and the division of labor, as more workers are hired

output will first increase at an increasing rate, then the output will increase at a decreasing rate

which of the following is not a source of technological advancement for a producer?

outsourcing some aspect of production

which of the following is a fixed cost?

payment to hire a security worker to guard the gate to the factory

Diminishing returns apply only to the

short run

the marginal rate of technical substitution is the rate at which a firm is able to _________________ while keeping the level of output ______________

substitute one output for another, constant

at a minimum scale

the firm has achieved the lowest possible average cost of production

a change in the slope of an is cost line is due to a change in

the price of one or both inputs

technology refers to

the process used by a firm to transform inputs into outputs of goods and services

the law of diminishing marginal returns states that at some point, adding more of a variable input to give amount of a fixed input will cause the marginal product of the _____________

variable input to decline.