Homework Answers
a) Increasing returns to scale occurs when long run average declines as output rises. It occurs from output level of 1 to 3.
b) Decreasing returns to scale occurs when long run average cost rises as output rises. It occurs from output level of 7 to 8.
c) Contant returns to scale occurs when there is no change in average cost which occurs from output level of 4 to 6.
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QUESTION 1: Dongfeng Automobile Company (DAC) a large automaker. The accompanying table shows DAC's long-run average...
If a firm has a U-Shaped long-run average cost curve, a
If a firm has a U-Shaped long-run average cost curve, a.) its fixed cost rises as output rises. b.) it must have increasing returns to scale at low levels or production and decreasing returns to scale at high levels of production. C.) it must have increasing returns to each input at low levels of production and decreasing returns to each input at high levels of production. D.) the firm can maximize its output by operating at the point of minimum...
The following graph shows the short-run average total cost curves and the long-run average total cost...
The following graph shows the short-run average total cost
curves and the long-run average total cost curve for a publishing
firm. The five marked quantities indicate points of tangency
between each short-run average total cost curve ( SRATC ) and the
long-run average total cost curve ( LRATC ); for example, Q1 marks
the point of tangency between SRATC1 and LRATC .
7. Long-run cost relationships The following graph shows the short-run average total cost curves and the long-run average...
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...
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...
QUESTION 8 LAC А во Reference: Ref 8-3 Refer to the long-run average cost (LAC) curve...
QUESTION 8 LAC А во Reference: Ref 8-3 Refer to the long-run average cost (LAC) curve graph. At which level of output is the firm experiencing decreasing returns to scale? A. Output level A B. Output level B C. Output level D. None of the above is correct.
QUESTION 30 A downward-sloping portion of a long-run average total cost curve is the result of:...
QUESTION 30 A downward-sloping portion of a long-run average total cost curve is the result of: economies of scale. diseconomies of scale. diminishing returns. the existence of fixed resources. 2.5 points QUESTION 31 In the long run, firms in many industries often experience a falling average total cost curve as a result of: gains through trade. increasing marginal returns. economies of scale. lower fixed costs. 2.5 points QUESTION 32 A large aircraft manufacturer, like Boeing, may have a...
11. Costs in the short run versus in the long run Ike's Bikes is a major...
11. Costs in the short run versus in the long run Ike's Bikes is a major manufacturer of bicydes. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost each month for various levels of production if it uses one, two or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Average Total Cost...
Table 1 shows the three short-run average total cost (ATC) curves for a firm with only...
Table 1 shows the three short-run average total cost (ATC) curves for a firm with only three possible plant sizes: (1) Size 1, (2) Size 2, and (3) Size 3. Find the firm's long-run average cost (LRAC) curve and answer Questions 17- 21 on the basis of the information in Table 1 Table 1 Only Three Possible Plant Sizes Long-Run Average Cost Curve LRAC Size 1 Size 2 QI ATC 20 S0.95 30 40 50 60 70 Size 3 Size...
1. On June 2, 2016, Fred’s TV Sales sold Mark a large HD TV, on account,...
1. On June 2, 2016, Fred’s TV Sales sold Mark a large HD TV, on account, for $12,000. Fred’s TV Sales uses the accrual method. In 2017, when the balance on the account was $8,000, Mark filed for bankruptcy. Fred was notified that he could not expect to receive more than $4,000 on the debt, and he immediately wrote off $4,000 for book purposes. In 2018, final settlement was made and Fred received only $1,000. What is the maximum amount...
The accompanying graph shows the relationship between the average annual increase in the price level and...
The accompanying graph shows the relationship between the average annual increase in the price level and the average annual increase in money supply across eight countries. 45-degree I Harpoglia a. What concept, related to monetary policy, does this graph help demonstrate? Valko Cherbani O Ragnar Nurkse's balanced growth theory O the liquidity preference model O buffer theory O convergence hypothesis Caz Resa Tyndaria Harnnastas Veckram eGonmorl'n monetary neutrality Increase in money supply (%) Use the concept or model identified in...
The following graph shows the short-run average total cost
curves and the long-run average total cost curve for a publishing
firm. The five marked quantities indicate points of tangency
between each short-run average total cost curve ( SRATC ) and the
long-run average total cost curve ( LRATC ); for example, Q1 marks
the point of tangency between SRATC1 and LRATC .
7. Long-run cost relationships The following graph shows the short-run average total cost curves and the long-run average...
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...
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 8 LAC А во Reference: Ref 8-3 Refer to the long-run average cost (LAC) curve graph. At which level of output is the firm experiencing decreasing returns to scale? A. Output level A B. Output level B C. Output level D. None of the above is correct.
11. Costs in the short run versus in the long run Ike's Bikes is a major manufacturer of bicydes. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost each month for various levels of production if it uses one, two or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Average Total Cost...
Table 1 shows the three short-run average total cost (ATC) curves for a firm with only three possible plant sizes: (1) Size 1, (2) Size 2, and (3) Size 3. Find the firm's long-run average cost (LRAC) curve and answer Questions 17- 21 on the basis of the information in Table 1 Table 1 Only Three Possible Plant Sizes Long-Run Average Cost Curve LRAC Size 1 Size 2 QI ATC 20 S0.95 30 40 50 60 70 Size 3 Size...
The accompanying graph shows the relationship between the average annual increase in the price level and the average annual increase in money supply across eight countries. 45-degree I Harpoglia a. What concept, related to monetary policy, does this graph help demonstrate? Valko Cherbani O Ragnar Nurkse's balanced growth theory O the liquidity preference model O buffer theory O convergence hypothesis Caz Resa Tyndaria Harnnastas Veckram eGonmorl'n monetary neutrality Increase in money supply (%) Use the concept or model identified in...
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