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Fixed costs are associated with Multiple Choice highly adjustable inputs such as labor. both the short run and the long run. the short run only. the long run only.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Fixed costs are associated with

Multiple Choice

highly adjustable inputs such as labor.
both the short run and the long run.
the short run only.
the long run only.

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Lines that represent bundles of inputs that cost the same total amount are called: cost curves. isoquants. isoprofit curves. O isocost curves. Ototal cost curves.
The feature that distinguishes short-run from the long-run is the*length of time it takes to produce 1 unit.existence of fixed costs.amount of variable resources used to produce 1 unit.the amount of profit the firm can expect to earn. The short-run is*less than a year.when a firm is unable to change some of its inputs.when a firm is unable to change output.when a firm is unable to change its price. The production function tells the firm*which input combination has the lowest total cost.which input combination produces a given output at the lowest possible cost.the maximum output that can be produced from a given amount of inputs.which output is the most profitable. In the short run*all costs are variable.all inputs are fixedthere may be fixed and variable inputs.all production decisions must be made on a daily basis. The law of diminishing marginal returns says that as units of labor are added to the production of an output when all other inputs are fixed, eventually*total product…
Diminishing returns occurs in the short run because The average product of labor will decrease after some amount of labor is hired in the short run b. There are fixed inputs to production in the short run The marginal product of labor will decrease after some amount of labor is hired in the short run There are variable inputs to production in the short run
The short run is the time frame A) during which the quantities of all resources are fixed. B) during which all costs are implicit costs. C) that is less than a year. D) during which the quantities of some resources are fixed. E) during which the quantities of all resources are variable.
fixed cost is the same at each output level except when no output is produced. when a firm produces no output,there are no fix cost. true or false? explain
The long run is defined as A) the period of time when all resources are variable. B) any time after one year. C) the period of time when most (more than 50 percent) resources are variable. D) the period of time when all resources are fixed.
The average fixed cost curve will never intersect with either the horizontal or vertical axis. graph. There must be proper positioning of the Average Total Cost curve and Average Variable Cost curve. graph. The Average Total Cost curve and Average Variable Cost curve must not touch (in between is average fixed costs – which can never be zero). graph.
Problem 2 (a) Find an example of a production technology that is such that two inputs must be used in fixed proportions (hopefully a different one from the examples discussed in class). Explain why you chose this example. Draw a typical isoquant of the example you found. (b) Find an example of a production technology that is such that two inputs are completely inter- changeable. Explain why you chose this example. Draw a typical isoquant of the example you found. (c) Find an example of convexity of production technology. Explain why you chose this example. Draw a typical isoquant of the example you found.
If a cost-minimization firm’s marginal product of labor equals 1 ton of output, while the marginal product of capital equals 7 tons of output and the cost of capital is $14 per unit, then A. The cost of labor must be $1/7 B. The cost of labor (wage rate) must be $2 C. The cost of labor must be $7 D. The cost of labor must be $14 as well