A firm scaled down its operation by reducing all inputs by 50% and experienced a more-than-50% decrease in output. If all input prices remain unchanged, the firm's long-run average cost exhibits:
A. economies of scale at the current output level.
B. diseconomies of scale at the current output level.
C. a constant long-run average cost at the current output level.
D. diminishing marginal returns at the current output level.
Answer: A
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Balanced growth paths can differ across countries due to differences in saving rates, labor force growth rates, and the rates of labor-augmenting technological change
These differences are likely to result in differences in ________, a common measure of the standard of living. A) happiness B) life expectancy C) income distribution D) real GDP per capita
When government intervenes in a competitive market by imposing an effective price ceiling, we would expect the quantity supplied to ________ and the quantity demanded to ________
A) fall; rise B) fall; fall C) rise; rise D) rise; fall
Social welfare functions can be formed in many ways. They can be additive, meaning that the all utilities curves are added together. They incorporate the idea of least-best, meaning that the utility of the person with the least is maximized. If you were a central planner for an economy, what type of social welfare function would you create?
What will be an ideal response?
If the production function is Q = KL and capital is fixed at 1 unit, then the marginal product of labor when L = 25 is:
A. 15. B. ΒΌ. C. 1/10. D. None of the answers are correct.