Which of the following represents the key difference between the short run and the long run?
A. In the long run, the firm makes commitments to a certain type of production technology which are represented as fixed costs in the long run. For example, they have signed a lease on a particular production facility. These fixed costs do not exist in the short run.
B. In the short run, the firm makes commitments to a certain type of production technology, which are represented as fixed costs in the short run. For example, they have signed a lease on a particular production facility. These fixed costs do not exist in the long run.
C. The short run refers to less than two years and the long run is over two years.
D. In the short run, all costs are fixed but in the long run, capital costs are variable.
Answer: B
You might also like to view...
Which of the following could cause the supply of carrots to decrease?
a. Consumers' incomes decrease. b. There is a technological advance in carrot production. c. Fertilizer costs increase. d. The number of farmers growing carrots increases. e. The price of carrots decreases.
Suppose that the state of California imposes a minimum wage of $7 per hour. In the entry-level labor market in California fast-food restaurants, the quantity of labor demanded at $7 per hour is 800 thousand, and the quantity of labor supplied is 1.2 million. Which of the following is true?
a. There is a shortage of 800 thousand workers in the labor market. b. There is a shortage of 400 thousand workers in the labor market. c. There is a surplus of 400 thousand workers in the labor market. d. There is a surplus of 1.2 million workers in the labor market.
As incomes increase worldwide, in addition to increased energy use, we expect to see use (and relative share) of grains and oilseeds used for animal feed
a. increase in highly developed economies only b. to decrease worldwide c. to increase worldwide d. stay at relatively the same share
Describe the three types of unemployment?
What will be an ideal response?