Principles of Economics (12th Edition)
12th Edition
ISBN: 9780134078779
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Chapter 10, Problem 1.4P
To determine
Increase in labor productivity and
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What are some examples to illustrate Henry Hazlitt's lesson that what is true in the short run may not be true in the long run?
What is the difference between a feasible production plan in the short run and in the long run? Give an example of a real product and the major inputs necessary to produce the product and then a short run and long run production plan.
Which of the following statements is (are) correct?
(x) Economists distinguish between short run and long run production by assuming that in the short run, at
least one input is fixed and in the long run all inputs are variable.
(y) In the long run, fixed inputs change to variable inputs so the size of a factory is not fixed in the long run.
(z) One would expect to observe diminishing marginal product when the labor force must use a smaller
amount of inputs to produce more of the product.
(x), (y) and (z)
(x) and (y) only
(x) and (z) only
(y) and (z) only
(x) only
Chapter 10 Solutions
Principles of Economics (12th Edition)
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- What best describes the long run? a period of time that labor can change a period longer than six months a period of time that at least one input cannot be changed a period of time that all inputs can be changedarrow_forwardThe basic difference between the short run and the long run is that?arrow_forwardI need help finding the true statements. I originally said it was 1,6, and 8 but was marked as incorrect. 1.Because capital is assumed to be fixed in the short run 2.Because labor is assumed to be fixed in the short run 3.Because capital is assumed to be variable in the short run 4.Because labor is assumed to be variable in the short run 5.Because capital is assumed to be fixed in the long run 6.Because capital is assumed to be variable in the long run 7.Because labor is assumed to be fixed in the long run 8.Because labor is assumed to be variable in the long runarrow_forward
- Question 23.23 The long run is a period of time, or a time frame, in which all resources are fixed. the level of output is fixed. the amount of all resources can be varied. the capacity of the production plant is fixed.arrow_forwardAccording to microeconomic theory, an input factor may be: a. Fixed in the short run, but will always be variable in the long run. b. Fixed in the short run, and fixed or variable in the long run. c. Variable in the short run, but will always fixed in the long run. d. Either fixed or flexible in the short run, and either fixed or flexible in the long run.arrow_forwardThe basic characteristic of the short run is that?arrow_forward
- For an increase in output, average costs change by more in the short-run than in the long run, but for decrease in output, the opposite is true. True or false explain in detail.arrow_forwardExplain the difference between the short and long runarrow_forwardIn Production Theory, what is meant by a “short-run” production period? What is meant by a “long-run” production period?arrow_forward
- In economics, the short run is a period of time A of one year or less.B in which all inputs are variable.C in which all inputs are fixed.D in which the quantity of at least one input is fixed and the quantities of the other inputs can be varied.E in which all inputs are variable but technology is fixed.arrow_forwardWhich of the following are short-run and which are long-run adjustments? a. Wendy’s builds a new restaurant. b. Harley-Davidson Corporation hires 200 more production workers. c. A farmer increases the amount of fertilizer used on his corn crop. d. An Alcoa aluminum plant adds a third shift of workers.arrow_forwardEdith is the owner and manager of a small coffee shop that employs three workers who use the shop’s one coffee machine to make and serve coffee to paying customers. Business has begun to pick up; lines are getting longer every day in her shop. On a busy morning, she sees her baristas scrambling to take orders, get cups, fill coffee from the coffee machine, add cream and sugar, and serve customers in a timely manner. She figures if she hires three more baristas she’ll be able to sell twice as much coffee Do you think she’s likely to be right? Why or why not? Yes, hiring more workers will mean more customers can be served. Yes, more workers will increase the supply and make more coffee available for sale. No, more workers will just create more chaos behind the counter as the additional workers still have to wait to fill from the coffee machine. No, the current workers just need better training to work more efficiently. Adding more and more workers does not constantly increase…arrow_forward
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