ch 8 eco

In the long run:

all inputs are variable.

If a firm increases the ratio of capital to labor, it becomes more:

capital intensive.

Marginal cost is the:

increase in total cost when one more unit of output is produced.

The short run is a period that is:

long enough in which to vary output but not plant capacity.

When diseconomies of scale outweigh economies of scale, the:

long-run average cost curve rises.

The law of diminishing marginal returns holds that the:

marginal product of any variable factor of production will eventually decline, assuming the quantities of other factors of production are given.

Variable costs include:

the cost of raw materials.

Given constant quantities of all other factors of production, when additional units of a variable factor of production add less and less to total output, then the firm is experiencing:

diminishing marginal returns.

"Diminishing marginal returns" means that:

each additional unit of an input used will increase output, but by smaller and smaller amounts.

If a firm experiences lower costs per unit as it increases production in the long run, this is an example of:

economies of scale.

In making decisions about factor mix, a firm is seeking to:

maximize profits.

As defined in the text, the long run is a planning period:

over which a firm can consider all factors of production as variable.

In the long run:

the firm considers all factors as variable.

Fixed costs include:

top management salaries.

Marginal cost is the change in:

total cost resulting from a 1-unit change in quantity.

Average total cost is the ratio of:

total cost to the quantity of output.

Marginal product, mathematically, is the slope of the:

total product curve.

Average variable cost is the ratio of:

variable cost to the quantity of output.

The costs incurred by a firm in its use of variable factors of production are:

variable costs.

A factor of production whose quantity can be changed during a particular period is a:

variable factor of production.

A total product curve indicates the relationship between:

variable input and output.

A variable factor of production is defined in the text as one:

whose quantity can be changed in a particular time period.

A fixed factor of production is defined in the text as one:

whose quantity cannot be changed in a particular period.