Which of the following statements is false? O a. Fixed costs exist in the short run, but not in the long run. O b. Changes in variable costs are reflected dollar-for-dollar in changes in total cost. O c. Since (total) fixed costs are constant as output changes in the short run, it follows that average fixed cost is constant in the short run. O d. Marginal cost is the cost of producing an additional unit of output.
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- In the short run production function O a. All inputs are variable O b. All inputs are fixed O C. There are fixed and variable inputs Od. Technology alone is variableIn the short run, the cost of O a. capital; labor O b. labor; capital c. electricity; wages d. raw materials; labor O e. capital; raw materials is variable, whereas the cost of is fixed. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.Which statement must be false? a) When a firm has increasing returns to scale in production, its marginal cost curve will be downward sloping. b) When a firm has constant returns to scale, its total cost curve will be an upward sloping line. c) When a firm has diminishing returns to scale in production, its average cost curve will be upward sloping. d) Every firm faces eventually diminishing returns to scale, where its average cost curve reaches its minimum.
- a. Why will firms in most markets be located at or close to the bottom of the longrun average cost curve? b. Distinguish between implicit and explicit costs. How is it possible to havepositive accounting profit and negative economic profit concurrently? c. Distinguish between economies of scale and constant returns to scale. What shape will the long-run average cost curve have for economies of scale andconstant returns to scale. d. What is the difference between production in the short run and production in the long run? Explain the shape of the long-run cost curve in relation to shortrun cost curves?a) True or False? Short-run average total cost curves have an "U the law of diminishing marginal returns. Ushape because of b) True or False? Long-run average total cost curves have an "U" shape for the same reason that short-run average total cost curves have an "U" shape.1.A 15 per cent increase in all inputs leads to only a 5 per cent increase in the output. Are the returns to scale increasing, constant or diminishing? Illustrate your answer2.What is the slope of an iso-cost line equal to and why? Provide mathematical explanation3.“By definition, cost is zero if a firm does not hire any input. Hence cost-minimization essentially means shutting down the operation of the firm.” Do you agree with the statement? Justify you answer by giving an explanation from microeconomic theory.4.What is meant by an expansion path? Illustrate expansion paths for a normal input and an inferior input.
- Which of the following statements about average and marginal cost is INCORRECT? (2)(1) The marginal cost curve cuts both the average cost and average variable costcurves at their minimum points;(2) The marginal cost curve cuts both the average fixed cost and average variablecost curves at their minimum points;(3) The marginal cost curve lies below the average cost curve when average costis decreasing;(4) Marginal cost is the change in total cost when one extra unit of output isproduced.2. Which of the following are true? (check all that apply) a.the average fixed cost is increasing if there are economies of scale occuring b.if the marginal cost is less than the average cost, the average cost is negatively sloped c. Average fixed costs never increase with output d. average total costs are always greater than or equal to average variable costsWhat is the firm’s total variable cost at this level of output? $ e. What is the firm’s fixed cost at this level of output? $ f. What is the firm’s profit if it produces this level of output? Instructions: If the firm is taking a loss, enter this as negative (−) profits. $ g. What is the firm’s profit if it shuts down? Instructions: If the firm is taking a loss, enter this as negative (−) profits. $ h. In the short run, should this firm continue to operate or shut down?
- How and why does a firm’s average-total-cost curvein the short run differ from its average-total-costcurve in the long run?Q.2 Based on your knowledge of the definition of the various measures of short-run cost, complete the Table-2 given below: Table-2 Quantity Total Cost Total Fixed Cost Total Variable Cost Average Cost Average Fixed Cost Average Variable Cost Marginal Cost 0 10 - - - - 1 4 14.00 4.00 4 2 17 7 3 6.33 3.33 3.00 2 4 23 13 5.75 2.50 5 19 3.80 6 38 9 7 1.43 5.71 8 9.38 1.25 8.13 156. Which of the following are true (check all that apply) Note: IRTS=increasing returns to scale, CRTS=constant returns to scale, DRTS=decreasing returns to scale a. if the production function exhibits IRTS, then the cost function will exhibit economies of scale b. if the production function exhibits IRTS, then the cost function will exhibit diseconomies economies of scale c. if the cost function exhibits diseconomies of scale, then the producing function exhibits DRTS d. if the production function exhibits CRTS, then the cost function will exhibit constant economies of scale e. if the production function exhibits DRTS then the cost function will exhibit diseconomies of scale
