ECON 1050 Chapter 11: Economics-1 (1) (dragged) 4

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salmoneagle674

17 Sep 2016

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The figure shows when output is plotted against labor, the curve is the tp curve. When output is plotted against variable cost, the curve is the. The shapes of a firm"s cost curves are determined by the technology is uses: Mc is at its minimum at the same output level at which mp is at its maximum. When mp is rising, mc is falling. Avc is at its minimum at the same output level at which ap is at its maximum. When ap is rising, avc is falling. The position of a firm"s cost curves depend on two factors: technology, prices of factors of production. Technological change influences both the product curves and the total cost curves. An increase in productivity shifts the product curves upward and the cost curves downward. If a technological advance results in the firm using more capital and less labour, fixed costs increase and variable costs decrease.

Related Questions

8. A perfectly competitive firm, which may or may not be in equilibrium, has the following situation in the short run, at its current level of output: ACP=MR=MC>AVC>0. We can say the following for sure about the cost curves of this firm: (A) AVC is rising, AC is falling, and MC is rising at the current output. (B) AVC is falling, AC is rising, and MC is rising at the current output. (C) AVC is at its minimum, AC is rising, and MC is rising at the current output. (D) AVC is at its minimum, AC is falling, and MC is rising at the current output. (E) AVC is rising, AC is at its minimum, and MC is rising at the current output. (F) AVC is falling, AC is at its minimum, and MC is rising at the current output. (G) AVC is rising, AC is falling, and MC is falling at the current output. (H) AVC is falling, AC is rising, and MC is falling at the current output. (1) None of the above

1. If a firm experiences economies of scale,

a. it moves up along the long-run average total cost curve.

b. expansion of output becomes more expensive for the firm.

c. the firm can reduce its per-unit cost by producing less.

d. the firm must shut down in the long run.

e. the firm can reduce its per-unit cost by expanding production.

2. The long-run average total- cost curve represents:

a. the maximum cost of producing any level of output when all the factors are fixed.

b. the lowest cost of producing any level of output when all the factors are variable.

c. the maximum cost of producing any level of output when all the factors are variable.

d. the lowest cost of producing any level of output when all the factors are fixed.

e. the lowest cost of producing any level of output when at least one factor fixed.

3. If the average variable cost if falling, then:

a. average fixed cost is rising.

b. marginal cost must be falling.

c. marginal cost must be rising.

d. marginal cost lies below average variable cost.

e. marginal cost lies above the average variable cost.

4. When the marginal-cost curve lies above the average-total-cost curve, the average-total-cost curve slopes up and the average-variable-cost curve slopes down.

a. true

b. false.

5. Demand is price-elastic at the top portion of a straight-line downward-sloping demand curve.

a. true

b. false.