micro ch 11 + 12 - Assignment Essays

question

True or False: In the short run, all inputs are fixed. This is _____.

answer

false

question

Average variable cost is:

answer

variable cost / output

question

Total cost divided by quantity produced is:

answer

average total cost

question

True or False: The marginal product of an input is the additional output that is produced by one more unit of the variable input. This is _____.

answer

false

question

True or False: In the long run, fixed cost can change. This is _____.

answer

true

question

The relationship between the quantity of inputs a firm uses and the quantity of output it produces is the:

answer

production function

question

According to the spreading effect, as output increases, average ________ cost decreases.

answer

fixed

question

The long run is the period of time:

answer

in which all inputs are variable

question

Average fixed cost is:

answer

fixed cost divided by output

question

True or False: There is a trade-off between higher fixed cost and lower variable cost for any output level. This is _____.

answer

true

question

The short run is a time period:

answer

in which the quantity of at least one input is fixed.

question

True or False: The average fixed cost curve is flat with a zero slope. This is _____.

answer

false

question

Average total cost is:

answer

total cost / output

question

Marginal cost is:

answer

the change in total cost divided by the change in output.

question

When the marginal product of labor is decreasing, marginal cost is:

answer

increasing

question

True or False: A commodity is a standardized product. This is _____.

answer

true

question

True or False: Price is higher than marginal cost when a competitive industry is in a long-run equilibrium. This is _____.

answer

false

question

If price is equal to average total cost, the firm:

answer

breaks even

question

True or False: The total cost of production of the industry's output is minimized when a competitive industry is in a long-run equilibrium. This is _____.

answer

true

question

The relationship between the long-run industry supply curve and the short-run industry supply curve is such that:

answer

the long-run supply curve is more elastic than the short-run supply curve.

question

True or False: The outcome is efficient in perfect competition because every consumer with a willingness to pay a price equal to or greater than marginal cost can purchase the good. This is _____.

answer

true

question

If costs are constant in an industry so that each firm faces the same cost structure, then the long-run industry supply curve is:

answer

perfectly elastic

question

True or False: In long-run equilibrium, all firms will have the same average total cost. This is _____.

answer

true

question

True or False: A firm in a perfectly competitive industry can earn economic profits in the long run as well as in the short run. This is _____.

answer

false

question

True or False: Long-run equilibrium in perfect competition is not efficient because firms are not earning economic profits. This is _____.

answer

false

question

Which of the following is an example of a standardized product?

answer

corn

question

The decisions of whether to stay in business and how much to produce depend on:

answer

economic profit

question

Suppose the perfectly competitive cotton-growing industry is in long-run equilibrium and no economic profits are being earned. If demand increases, firms will:

answer

enter the industry

question

The long-run industry supply curve can slope downward if average total costs are:

answer

decreasing

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question

True or False: In the short run, all inputs are fixed. This is _____.

answer

false

question

Average variable cost is:

answer

variable cost / output

question

Total cost divided by quantity produced is:

answer

average total cost

question

True or False: The marginal product of an input is the additional output that is produced by one more unit of the variable input. This is _____.

answer

false

question

True or False: In the long run, fixed cost can change. This is _____.

answer

true

question

The relationship between the quantity of inputs a firm uses and the quantity of output it produces is the:

answer

production function

question

According to the spreading effect, as output increases, average ________ cost decreases.

answer

fixed

question

The long run is the period of time:

answer

in which all inputs are variable

question

Average fixed cost is:

answer

fixed cost divided by output

question

True or False: There is a trade-off between higher fixed cost and lower variable cost for any output level. This is _____.

answer

true

question

The short run is a time period:

answer

in which the quantity of at least one input is fixed.

question

True or False: The average fixed cost curve is flat with a zero slope. This is _____.

answer

false

question

Average total cost is:

answer

total cost / output

question

Marginal cost is:

answer

the change in total cost divided by the change in output.

question

When the marginal product of labor is decreasing, marginal cost is:

answer

increasing

question

True or False: A commodity is a standardized product. This is _____.

answer

true

question

True or False: Price is higher than marginal cost when a competitive industry is in a long-run equilibrium. This is _____.

answer

false

question

If price is equal to average total cost, the firm:

answer

breaks even

question

True or False: The total cost of production of the industry's output is minimized when a competitive industry is in a long-run equilibrium. This is _____.

answer

true

question

The relationship between the long-run industry supply curve and the short-run industry supply curve is such that:

answer

the long-run supply curve is more elastic than the short-run supply curve.

question

True or False: The outcome is efficient in perfect competition because every consumer with a willingness to pay a price equal to or greater than marginal cost can purchase the good. This is _____.

answer

true

question

If costs are constant in an industry so that each firm faces the same cost structure, then the long-run industry supply curve is:

answer

perfectly elastic

question

True or False: In long-run equilibrium, all firms will have the same average total cost. This is _____.

answer

true

question

True or False: A firm in a perfectly competitive industry can earn economic profits in the long run as well as in the short run. This is _____.

answer

false

question

True or False: Long-run equilibrium in perfect competition is not efficient because firms are not earning economic profits. This is _____.

answer

false

question

Which of the following is an example of a standardized product?

answer

corn

question

The decisions of whether to stay in business and how much to produce depend on:

answer

economic profit

question

Suppose the perfectly competitive cotton-growing industry is in long-run equilibrium and no economic profits are being earned. If demand increases, firms will:

answer

enter the industry

question

The long-run industry supply curve can slope downward if average total costs are:

answer

decreasing

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