In a call center, which of the following situations can be considered as a variable input in the short run?
A) the level of computer software being utilized
B) the number of call center representatives on duty at the center
C) the number of call center managers or supervisors
D) the size (e.g., square footage) of the call center
Ans: B) the number of call center representatives on duty at the center
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For a perfectly competitive firm, in the long-run equilibrium
A) P = MC = ATC = MR. B) MR = MC = AFC. C) MR = P = ATC = AFC. D) P = MC > ATC.
If the price of an item can freely adjust, a market will
A) always move towards equilibrium. B) always have an excess quantity demanded. C) always have an excess quantity supplied. D) never move towards equilibrium because prices are always increasing.
Suppose that, in the long run, a dairy's variable costs are VC = 2Q2 (where Q is the number of gallons of milk produced each day), its marginal cost is MC = 4Q and there is an avoidable fixed cost of $50 per day. In the long run, there is free entry into the market. What is the dairy's total cost function?
A. TC = 2Q2 + 4Q B. TC = 4Q + 50 C. TC = 2Q2 + 50 D. TC = 2Q2 + 4Q + 50
In situations where people make decisions with perfectly predictable consequences, traditional economic models cannot explain:
A. why people experience regret. B. what the rational choice should be. C. how people maximize their utility. D. how risk aversion influences decisions.