Homework Answers
Ans) the correct option is a) diseconomies of scope
Diseconomies of scope occurs when when the average cost of production is higher from the joint production of services than the average costs from an individual firm producing it
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Two firms, each producing different goods, can achieve a greater output than one form producing both...
Most firms will eventually face increasing average costs as they try to increase output. The firm...
Most firms will eventually face increasing average costs as they try to increase output. The firm finds that each extra unit of output requires more inputs to produce than previous units, an outcome described as the law of diminishing marginal returns. The law of diminishing marginal returns states that as you try to expand output, your marginal productivity (the extra output associated with extra inputs) eventually declines The law of diminishing returns can limit the economies of scale and economies...
QUESTION TWO: When economies of scale are substantial, larger firms can achieve lower average costs of...
QUESTION TWO: When economies of scale are substantial, larger firms can achieve lower average costs of production or distribution than their smaller rivals, giving the larger firms a permanent competitive advantage in some industries. By the same token, when diseconomies of scale are operative, larger firms can suffer a greater loss when compared to their smaller rivals. Smaller firms are then able to translate the benefits of small size into a distinct competitive advantage.” In terms of the above statement:...
all of them Question 7 (1 point) If the long-run average cost is upward sloping, the...
all of them
Question 7 (1 point) If the long-run average cost is upward sloping, the firm is experiencing decreasing returns diseconomies of scale Oincreasing costs all of the above none of the above Question 8 (1 point) A production function in economics means any function performed by an employee when producing output the various functions performed by all employees when producing output the function performed by the person in charge of the production process the relationship between inputs and...
1. Explicit costs ______. do not involve outlays of cash are greater than implicit costs involve...
1. Explicit costs ______. do not involve outlays of cash are greater than implicit costs involve outlays of cash are less than implicit costs 2. Opportunity costs can vary from person to person and ______________________. can be calculated easily most of the time can even be different for the same person at different points in time are always known and predictable represent explicit costs only 3. An example of an implicit cost would be ______. transportation expenses salaries rental costs...
Question 3 Long-run average total cost (LAC) O a represents the lowest average cost of producing a given level of...
Question 3 Long-run average total cost (LAC) O a represents the lowest average cost of producing a given level of output. b. is always equal to or greater than short-run average total cost. c. can be measured in the short-run. If a firm is producing the level of output at which long-run average cost equals long-run marginal cost, then a long-run marginal cost is at its minimum point b. long run average cost is at its minimum point. c long...
Suppose a firm doubles the amount of all of its factors of production and, as a result, output increases from 100 to 300...
Suppose a firm doubles the amount of all of its factors of production and, as a result, output increases from 100 to 300 units. This firm is operating under Increasing cost Decreasing costs Long-run decreasing returns Decreasing total cost Diseconomies of scales Positive economic profit is The excess of revenues over implicit costs A signal for firms in other industries to expand their output A signal for resources to enter the industry in the long run The excess of revenues...
5. A consumer buys two goods. If the prices of both goods fall by 10% and...
5. A consumer buys two goods. If the prices of both goods fall by 10% and the consumer's income falls by 20%, then a. the slope of the consumer's budget line will change. b. the consumer's budget line will shift out from the origin with the slope unchanged. c. the consumer's budget line will shift in toward the origin with the slope unchanged. d. the consumer's budget line will not change. 6. The figure at the right shows the isoquant...
Consider a farmer who can increase the amount of wheat he grows per acre by using more fertilizer. If the farmer f...
Consider a farmer who can increase the amount of wheat he grows per acre by using more fertilizer. If the farmer faces diminishing marginal returns to fertilizer, he must also face... decreasing marginal costs. a tragedy of the commons. economies of scale. constant marginal costs. increasing marginal costs. If the long-run average cost of production falls as the firm increases its level of output, then the firm exhibits economies of scale. diseconomies of scale. constant returns to scale. None of...
The following table shows how much output a firm can produce as it relates to the...
The following table shows how much output a firm can produce as it relates to the use of both capital K and labor L: KIL 2 40 60 75 85 90 3 4 65 85 100 110 115 70 90 105 115 120 20 40 2 3 4 75 90 100 105 65 70 Starting from K-2 and L-2, if both inputs are scaled by factor t, then O A. Ift1.5, production exhibits constant returns to scale OB. Ift 2,...
13 Question (5 points) K3L3 is a good approximation of actual An economic analysis of the...
13 Question (5 points) K3L3 is a good approximation of actual An economic analysis of the production of laptop computers concludes that the function f(K,L) = production. Let K represent all capital used in production while L represents hours of labor. 20th attempt Part 1 (2 points) See Hint What are the returns to scale in laptop computer production? Choose one: O A. increasing O B. decreasing O C. constant O D. The returns to scale vary with different combinations...
Most firms will eventually face increasing average costs as they try to increase output. The firm finds that each extra unit of output requires more inputs to produce than previous units, an outcome described as the law of diminishing marginal returns. The law of diminishing marginal returns states that as you try to expand output, your marginal productivity (the extra output associated with extra inputs) eventually declines The law of diminishing returns can limit the economies of scale and economies...
all of them
Question 7 (1 point) If the long-run average cost is upward sloping, the firm is experiencing decreasing returns diseconomies of scale Oincreasing costs all of the above none of the above Question 8 (1 point) A production function in economics means any function performed by an employee when producing output the various functions performed by all employees when producing output the function performed by the person in charge of the production process the relationship between inputs and...
Question 3 Long-run average total cost (LAC) O a represents the lowest average cost of producing a given level of output. b. is always equal to or greater than short-run average total cost. c. can be measured in the short-run. If a firm is producing the level of output at which long-run average cost equals long-run marginal cost, then a long-run marginal cost is at its minimum point b. long run average cost is at its minimum point. c long...
5. A consumer buys two goods. If the prices of both goods fall by 10% and the consumer's income falls by 20%, then a. the slope of the consumer's budget line will change. b. the consumer's budget line will shift out from the origin with the slope unchanged. c. the consumer's budget line will shift in toward the origin with the slope unchanged. d. the consumer's budget line will not change. 6. The figure at the right shows the isoquant...
Consider a farmer who can increase the amount of wheat he grows per acre by using more fertilizer. If the farmer faces diminishing marginal returns to fertilizer, he must also face... decreasing marginal costs. a tragedy of the commons. economies of scale. constant marginal costs. increasing marginal costs. If the long-run average cost of production falls as the firm increases its level of output, then the firm exhibits economies of scale. diseconomies of scale. constant returns to scale. None of...
The following table shows how much output a firm can produce as it relates to the use of both capital K and labor L: KIL 2 40 60 75 85 90 3 4 65 85 100 110 115 70 90 105 115 120 20 40 2 3 4 75 90 100 105 65 70 Starting from K-2 and L-2, if both inputs are scaled by factor t, then O A. Ift1.5, production exhibits constant returns to scale OB. Ift 2,...
13 Question (5 points) K3L3 is a good approximation of actual An economic analysis of the production of laptop computers concludes that the function f(K,L) = production. Let K represent all capital used in production while L represents hours of labor. 20th attempt Part 1 (2 points) See Hint What are the returns to scale in laptop computer production? Choose one: O A. increasing O B. decreasing O C. constant O D. The returns to scale vary with different combinations...
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