The answer is option d- only in the short run
Decreasing returns occur in the short run when one factor (e.g.
capital) is fixed when the variable factor of production (e.g.
labour) is increased, a point occurs when it becomes less
productive and thus a decreasing marginal and then average product
eventually occurs.
This is because, when capital is set, additional workers will
eventually find themselves in the way of each other as they try to
increase production. Think of the impact of extra workers in a
small café, for example. If more employees are working, production
can increase, but slower and slower.
The law applies only in the short term because all variables are
variable in the long run.
Question 7 1 pts The phenomenon of diminishing returns happens: in both the long and short runs only in the market...
What is the difference between "diminishing marginal returns" and "diseconomies of scale"? a. Both concepts explain why marginal cost increases after some point but diminishing marginal returns applies only in the short run when there is at least one fixed factor, while diseconomies of scale applies in the long run when all factors are variable. b. Both concepts explain why average total cost increases after some point but diminishing marginal returns applies only in the short run when there is...
Question 19 The law of diminishing marginal returns explains the general shape of the firm's a short-run cost curves. ob the laws of diminishing returns has nothing to do with cost curves c. long-run cost curves! d. both short-run and long-run cost curves.
1- Analysis of the short and long runs indicates that the ______ assumptions are most appropriate in ______. a. classical; both the short and long runs. b. Keynesian; both the short and long runs. c. classical; the short run, whereas the Keynesian assumptions are most appropriate in the long run. d. Keynesian; the short run, whereas the classical assumptions are most appropriate in the long run. 2- The U.S. recession of 2001 can be explained in part by a declining...
1). Describe the law of eventually diminishing marginal returns. Does this law occur in the short run or in the long run. Why? Will a profit maximizing firm ever operate in the range of diminishing returns. Explain your answer.
study guide help
(20) 6) Which of the following statements correctly describes the market structure known as perfect competition? There are many buyers and sellers, none of which is large in relation to total sales or purchases. Each firm produces and sells a homogeneous product. There are no barriers to entry or exit. All of the above None of the above and productive (2 pts) 7) In perfect competition, resource allocative efficiency holds in efficiency holds in both the short-run...
7. Most economists believe that prices are: a) flexible in the short run but many are sticky in the long run. b) flexible in the long run but many are stick in the short run. c) sticky in both the short and long runs. d) flexible in both the short and long runs. 8. If the short run aggregate supply curve is horizontal, then changes in aggregate demand affect: a) level of output but not prices. b) prices but not...
Question 1) Suppose the economy is operating at both short-run and long-run equilibrium. Suppose consumers’ wealth increases, and they begin spending more on Tide Pod laundry detergent for entertainment purposes. Draw the graphs and shifts for the following questions and provide the specific mechanisms and channels. a) What happens in the short run to both the aggregate price level and aggregate output when this shock occurs? b) What will happen in the long run to both aggregate price level and...
a market in perfect competition is in long-run equilibriam.
what happens to the market if all of the workers complete their
bachelors degree and request higher wages?
1. In a Word document, write a one-page essay in which you answer the following question. A market in perfect competition is in long-run equilibrium. What happens to the market if all the workers complete their bachelor's degree a request higher wages?
5 pts Question 5 In a competitive market the current price is $11, and the typical firm in the market has ATC $11.50 and AVC $11.15 In the short run firms will shut down, and in the long run firms will leave the market. In the short run firms will continue to operate, but in the long run firms will leave the market. New firms will likely enter this market to capture any remaining economic profits O The firm will...
Question 7 3 pts A pharmaceutical firm issues two different bonds, Bond Short and Bond Long. Bond Short has a five year term and Bond Long has a 20 year term. Both bonds initially sell at par. Soon after issuing these bonds, the market interest rate drops substantially. What are the new relative prices of Bond Short and Bond Long? 0 Price Bond Long > Price Bond Short > $1000 D Price Bond Long Price Bond Short $1000 D) Price...