question
What is the difference between technology and technological change?
answer
Technology is the process of using inputs to make output, while technological change is when a firm is able to produce
the same
output using
fewer
inputs.
the same
output using
fewer
inputs.
question
In economics, the best definition of technology is
answer
the process a firm uses to turn inputs into outputs.
question
positive technological change is defined as
answer
being able to produce more output using the same inputs and being able to produce the same output with fewer inputs
question
Which of the following is an example of positive technological change?
A) a firm's workers are no longer monitored
B) A firm uses inputs to produce output
C) a firm Installs faster machinery
D) a firm is able to hire cheaper labor
E) a firm becomes more profitable by increasing revenue
A) a firm's workers are no longer monitored
B) A firm uses inputs to produce output
C) a firm Installs faster machinery
D) a firm is able to hire cheaper labor
E) a firm becomes more profitable by increasing revenue
answer
C) a firm Installs faster machinery
question
What is the difference between the short run and the long run?
answer
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.
question
Any cost that remains unchanged as output changes represents a firm's
answer
fixed cost
question
Any cost that changes as output changes represents a firm's
answer
variable cost
question
An implicit cost is
answer
a non-monetary opportunity cost
question
How are implicit costs different from explicit costs?
answer
An explicit cost is a cost that involves spending money, while an implicit cost is a non-monetary cost.
question
The production function is the relationship between
answer
the inputs employed by a firm and the maximum output it can produce with those inputs.
question
What is sometimes called accounting costs?
answer
explicit costs
question
What is the law of diminishing returns?
answer
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.
question
Does the law of diminishing returns apply in the long run?
answer
No
question
When the average product of labor is decreasing, the average product of labor is ______________
the marginal product of labor
the marginal product of labor
answer
greater than
question
When the average product of labor is increasing, the average product of labor is ______________
the marginal product of labor
the marginal product of labor
answer
less than
question
As output increases, the vertical distance between average total cost and average variable cost curves gets _______ and equals _______.
answer
smaller; average fixed cost
question
Economies of scale occur when
answer
a firms long run-average costs decrease with output
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