Explain how "learning by doing" and transportation costs each affect the long-run average cost curve
What will be an ideal response?
Learning by doing results in increased productivity of an input. Thus, for each scale of operation, the cost of producing each unit of output decreases because the amount of inputs needed to produce a unit of output decreases. Thus, the short-run and, therefore, long-run average cost curves shift down. Including transportation costs in the long-run average cost function causes the LRAC curve to shift up, all else constant. In addition, if average transportation costs increase with the scale of production because goods have to be shipped over greater distances, this will cause the quantity at which long-run average costs are minimized to decrease as well.
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As a result of a war in the country of Omega, refugees flee to the country of Alpha to seek employment. Holding other factors constant, the influx of refugees will ________ the real wage in Alpha and ________ employment in Alpha.
A. decrease; decrease B. increase; increase C. increase; decrease D. decrease; increase
Real income per person was the same until:
A. the 1800s, when the Industrial Revolution caused it to grow. B. the 1500s, when the Renaissance caused it to grow. C. the 1900s, when wireless technology caused it to grow. D. Real income per person has been roughly the same for the last three centuries.
If the U.S. government imposed a tariff on imported steel, it would be expected that
A. the quantity of steel used in the United States would decrease. B. the quantity of steel imported would be reduced. C. the price of steel would rise. D. All of the choices are true.
The choice of some workers to put in fewer hours so they can spend time pursuing hobbies is an example of how ______ influences income.
a. job preference b. age c. education d. worker preference