EBK ECONOMICS TODAY
18th Edition
ISBN: 9780133920116
Author: Miller
Publisher: YUZU
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Chapter 23, Problem 2CTQ
To determine
In view of the last year’s draught in corn production, for supplying to ethanol industry, whether Renewable Fuel Association is viewing next year as a short-run period or long-run period.
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The long run is the period of time during which...
The basic characteristic of the short run is that?
What stage of production is the increase in output that results from increase in a firm's outputs by some proportion? If the firm is operating efficiently, how can it reduce cost in the short run?
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- Which of the following are short-run and which are longrun adjustments? IBM hires 200 more software engineers.arrow_forwardWhat is the difference between the short-run and long-run production periods? Why is it relevant to the economics analysis of firms? If different types of inputs are not as easy to adjust in a certain time period, what difference does this make to the graphs of cost curves for economic analysis?arrow_forwardThe basic difference between the short run and the long run is that?arrow_forward
- Can you explain to me about this slide? I'm doing my revision. Thank you in advance.arrow_forwardFor 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 how a change in the price of one input factor changes a firm’s long-run expansion path?arrow_forward
- 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.arrow_forwardWhat is the increase in output that results from an increase in all of a firm’s outputs by some proportions? In long run production, a change in output necessitates the what?arrow_forwardlong run equilibrium (label this point A in your graph) then draw the short-run impact of the described change and label the new short-run equilibrium as point B in your graph. Finally draw the new long run equilibrium situation after full adjustment to the described changes and label this long run equilibrium as point C in your graph. Your graph for each situation should contain the initial LRAS, AD and AS curves as well as the any new curves that occur in response to the described change. On the graph be sure to mark the actual path the economy follows as it moves along the AS and AD curves. Give a brief description in words of what happens in the short run and long run in each scenario. There is an enormous drought that affects crop yields throughout the country.arrow_forward
- Discuss why the long-run ATC curve is generally U-shapedarrow_forwardA producer has the following technology.y= 6K^(1/2)L^(1/2) a) Prove formally that the production function exhibits constant returns to scale (use “λ” argument). b) Find analytically MPL and MPK. Is MPL increasing, decreasing, or constant inL? Is MPK increasing, decreasing, or constant in K? c) Short-run: Given stock of capital ̄K= 1 find labor demand (formula) of a competitive firm. Find equilibrium real wage rate if labor supply is given by Ls= 9 (one number). d) Assume again ̄K= 1 and that Ls= 9. The government adopts a real minimum wage of wmin/p=(3/2). Find labor demand (one number) and the unemployment rate (one number). Please depict the equilibrium on a graph with the real wage on the vertical axis and labor on the horizontal axis, indicating the equilibrium quantity of labor, wage, and unemployment, as well as the relevant curves. e) Find the cost function given prices of inputs wK= 4 and wL= 1 (formula). Plot the cost function on a graph, indicating the slope of the cost…arrow_forwardTrue or False: For an increase in output, average costs change by more in the short-run than in the long-run, but for a decrease in output, the opposite is true.arrow_forward
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