exam 2 econ pt 1

The slope of a long-run average total cost curve exhibiting decreasing returns to scale is: a) zero b) infinite c) positive d) negative

c) positive

The marginal cost curve intersects the average variable cost curve at: a) its lowest point b) its maximum c) its endpoint d) no point; the curves don't intersect

a) its lowest point

Diminishing marginal returns mean that: a)each additional unit of an input used will cause output to decrease. b)each additional unit of an input used will increase output, but by smaller and smaller amounts. c)each additional unit of an input used will increase output by larger and larger amounts. d) the firm is maximizing profit.

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

Marginal cost _________over the range of increasing marginal returns and ________over the range of diminishing marginal returns. a) increases;falls b) falls;increases c) is constant; rises d) increases; is constant

b) falls; increases

Decreasing and increasing returns to scale account for the shape of the: a) short-run average total cost curve b) short-run average variable cost curve c) long-run average total cost curve d) marginal cost curve in both the short run and the long run

c) long-run average total cost curve

In the short run: a) all inputs are fixed. b) all inputs are variable c)some inputs are fixed and some inputs are variable. d) all costs are variable

c) some inputs are fixed and some inputs are variable.

The slope of a long-run average total cost curve exhibiting increasing returns to scale is: a) zero b) infinitive c) positive d) negative

d) negative