ch 11 tech, production, and costs

example of technological change

all of the above

whats the dif between short run and long run Is the amount of time that separates the short run from the long run the same for every​ firm?

In the short​ run, at least one of a​ firm's inputs is​ fixed, while in the long​ run, a firm is able to vary all its inputs and adopt new technology. no

law of diminishing returns

adding more of a variable input to the same amount of a fixed input will eventually cause the marginal product of the variable input to decline.

How do specialization and division of labor typically affect the marginal product of​ labor? In the initial stages of​ production, specialization and division of labor lead to an increasing marginal product for​ workers,

allowing workers to concentrate on a few tasks so that they become more skilled at doing them quickly and efficiently

afc + avc Which cost measure is the​ exception? As output​ increases, the vertical distance between average total cost and average variable cost curves gets​ _______ and equals​ _______.

avg total cost avg fixed cost smaller; avg fixed cost

Your company incurs a cost for store rent store rent​. in the long run, the cost of store rent

becomes a variable cost

What can be said of its marginal cost​ curve? The​ firm's marginal cost curve must be

below the avg total cost curve

postitive tech change occurs

either a and b

positive technical change positive change is when

firm is able to produce more output w same inputs

implicit accounting costs

forgone salary and interest explicit

production function short run production function hold constant

illustrating the relationship between inputs and the maximum amounts of output that the firm can produce with these inputs. amount of capital

A firm might experience economies of scale because

large firms may be able to purchase units at lower costs than smaller competitors

Which of the following terms refers to the lowest cost at which a firm is able to produce a given level of output in the long​ run, when no inputs are​ fixed? economies of scale happen when firm's long run avg total cost __ as output increases

long-run avg cost curve decreases

implicit costs how are they dif

nonmonetary opportunities An explicit cost is a cost that involves spending​ money, while an implicit cost is a nonmonetary cost.

Refer to the to graph on the right. From the origin up until point ​A, from point a up until point b

output increases at an increasing rate output increases at a decreasing rate

Suppose Sheri owns a restaurant that serves pizza using three​ inputs: workers, restaurant space​ (and layout), and ovens. If workers are fixed restaurant space​ (and layout) is fixed and ovens are variable then Sheri is producing pizza in the

short run

min efficient scale firm that doesnt reach its min efficient scale

the level of output at which all economies of scale are exhausted all economies of scale are exhausted. will lose money if it remains in business

If the marginal product of labor is falling, is the marginal cost of production rising or​ falling? Briefly explain. If the additional output from each new worker is falling.

the marginal cost of that output is rising because the only additional cost to producing more output is the additional wages paid to hire more workers.

What is the difference between total cost and variable cost in the long​ run? In the long​ run,

the total cost of production equals the variable cost of production.

costs are affected by the level of output produced

variable costs

diseconomies of scale What is the main reason that firms eventually encounter diseconomies of scale as they keep increasing the size of their store or​ factory?

when a firm's long-run avg cost increase w output firms have difficulty coordinating production

economies of scale occur For which of the following​ reason(s) may firms experience economies of​ scale?

when a​ firm's long-run average costs decrease with output. All of the above.

The marginal cost curve intersects the average variable cost curve at the level of output where average variable cost is at a minimum because

when the marginal cost of the last unit produced is below the​ average, it pulls the average​ down, and when the marginal cost is above the​ averge, it pulls the average up.

whats the dif between tech and technological change

Technology is the process of using inputs to make​ output, while technological change is when a firm is able to produce more output using the same inputs.