ECON 101 Chapter Notes - Chapter 9: Average Variable Cost, Marginal Cost, Fixed Cost

45 views5 pages

beigebeetle534

5 Dec 2018

School

Department

Course

Professor

For unlimited access to Textbook Notes, a Class+ subscription is required.

Document Summary

Average fixed cost: equal to fixed cost divided by the level of output. Average product of labour: total amount of output produced by a firm divided by the quantity of workers hired. Average variable cost: equal to variable cost divided by the level of output. Constant returns to scale: long-run average cost curve is flat. Diseconomies of scale: at high levels of output, the long-run average cost curve turns up. Economies of scale: long-run average cost curve falls as output expands. Fixed costs: costs that remain constant as output changes. Law of diminishing returns: causes the marginal product of labour to decline. Long run: a firm is able to adopt new technology and to increase or decrease the size of its physical plant. Long-run average cost curve: shows the lowest cost at which a firm is able to produce a given level of output in the long run.

Related Questions

36) A firm encountering economies of scale over some range of output will have a:

a) rising long-run average cost curve.

b) falling long-run average cost curve.

c) constant long-run average cost curve.

d) rising, then falling, then rising long-run average cost curve.

37) When a firm doubles its inputs and finds that its output has more than doubled, this is known as:

a) economies of scale.

b) constant returns to scale.

c) diseconomies of scale.

d) a violation of the law of diminishing returns.

38) The larger the diameter of a natural gas pipeline, the lower is the average total cost of transmitting 1,000 cubic feet of gas 1,000 miles. This is an example of:

a) economies of scale.

b) normative economies.

c) diminishing marginal returns.

d) an increasing marginal product of labor.

39) If all resources used in the production of a product are increased by 20 percent and output increases by 20 percent, then there must be:

a) economies of scale.

b) constant returns to scale.

c) diseconomies of scale.

d) increasing the average total costs.

40) Economies and diseconomies of scale explain why the:

a) short-run average fixed cost curve declines so long as output increases.

b) marginal cost curve must intersect the minimum point of the firm's average total cost curve.

c) long-run average total cost curve is typically U-shaped.

d) short-run average variable cost curve is U-shaped.

jadeshark411

A firm scaled up its operation by increasing all inputs by 100%. If the firm experienced a 150% increase in the output, the firm's long-run average cost exhibits:

A) economies of scale at the current output level.
B) diseconomies of scale at the current output level.
C) a constant long-run average cost at the current output level.
D) diminishing marginal returns at the current output level.

periwinklelizard932

constant costs

increasing returns to scale

constant returns to scale

isocost curve

decreasing returns to scale

isoquant

diseconomies of scale

long-run average cost

economies of scale

long-run marginal cost

economies of scope

marginal rate of technical substitution

expansion path

short-run expansion path

___A curve that displays all the various combinations of inputs that will produce a given amount of output.

___The rate at which one input is substituted for another along an isoquant.

___Line that shows all the possible combinations of inputs that can be purchased for a given total cost.

___A curve showing all of the cost-minimizing levels of input usage for various levels of output.

___When the usage of all inputs is increased by an equal proportionate amount, output ___increases by exactly the same proportion.

___When the usage of all inputs is increased by an equal proportionate amount, output increases by a larger proportionate amount.

___When the usage of all inputs is increased by an equal proportionate amount, output increases by a smaller proportionate amount.

___Cost per unit in the long run.

___The change in long-run total cost per unit change in output.

___When long-run average cost falls as output increases.

___When long-run average cost increases with increases in output.

___Long-run average and marginal costs are equal for all levels of output.

___The situation in which the joint cost of producing two goods is less than the sum of the separate costs of producing the two goods.

___Horizontal line showing the cost-minimizing input combinations for various output levels when capital is fixed in the short run.

aquamarineguinea-pig889

ECON 101 Chapter Notes - Chapter 9: Average Variable Cost, Marginal Cost, Fixed Cost

Document Summary

Get access

Related Documents

ECON 101 Lecture Notes - Lecture 8: Dofasco, Isocost, Isoquant

ECON 101 Lecture Notes - Lecture 9: Fixed Cost, Historical Cost, Variable Cost

ECON 2005 Chapter Notes - Chapter 7: Marginal Product, Fixed Cost, Average Cost

Related Questions