ECON MICRO
5th Edition
ISBN: 9781337000536
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 8, Problem 3.5P
To determine
Various options available with a firm has for minimizing its losses in the short run.
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3) The short run is a period of time in which
A) nothing the firm does can be altered.
B) the amount of output is fixed.
C) prices and wages are fixed.
D) the quantity of at least one factor of production is fixed.
1a.
Define average product and marginal product. Briefly explain reasons for a diminishing marginal product.
b.
What are three stages of production? Which stages reflect a firm’s observed behavior versus experimental situation? Briefly justify your answer.
11-
Al Shaihani is a halwa manufacturer which is famous for Omani Saffron Halwa. They wanted to increase their supply of halwa for the coming month of August 2021. However, due to COVID-19 Pandemic, the only available resources they could change are the number of their workers. Determine which type of production period Al Shaihani business is facing?
a.
Long run
b.
All of these
c.
Short - run
d.
Mid-run
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Similar questions
- It is clear that businesses operate in the short run, but do they ever operate in the long run? Discuss.arrow_forward1. The structure of costs in the short run . Take an example 2. The structure of costs in the long run. Take an examplearrow_forward(9) The short run is a time period in which: (a) all resources are fixed. (b) the level of output is fixed. (c) the size of the production plant is variable. (d) some resources are fixed and others are variable.arrow_forward
- 11. The law of diminishing marginal returns: a. is relevant in both the short and the long-run. b. says that increasing fixed inputs eventually results in smaller and smaller increases in total output. c. says that increasing variable inputs eventually results in smaller and smaller increases in total output. d. says that increasing variable inputs eventually results in smaller and smaller increases in total cost.arrow_forward30.Refer to Figure 1. Curve 1 is Outdoor Equipment's Select one: a. Marginal cost curve. b. Average total cost curve. c. Average fixed cost curve. d. Average variable cost curve.arrow_forward27. If a firm will produce an additional unit of good or services, determine what will happen to their costs? a. The total cost will decrease b. The total cost will increase c. The total cost will be the same d. The total cost will be equalarrow_forward
- 18. In the short run, Boeing cannot: A. hire more engineers to design jetliners B. use additional rubber and steel in jetliner production C. employ more clerical workers in the finance department D. increase the size of its jetliner assembly plantarrow_forward5. Study Questions and Problems #5 Suppose there is a decrease in the demand for high-definition televisions. What effect might this change have on the short-run average total cost curve for this product? _____ a) A decrease. When demand decreases, the short-run average total cost falls. b) An increase. When demand decreases, the short-run average total cost increases. c) No change. Demand determines the final price but not the costs for the product.arrow_forward(10) The law of diminishing returns states that: (a) as a firm uses more of a variable resource, given the quantity of fixed resources, the average product of the firm will increase. (b) as a firm uses more of a variable resource, given the quantity of fixed resources, marginal product of the firm will eventually decrease. (c) in the short run, the average total costs of the firm will eventually diminish. (d) in the long run, the average total costs of the firm will eventually diminish.arrow_forward
- 1.Costs that are "fixed": a. do not vary in the short run, but can change in the long run. b. will never change. c. vary with output, but not with resource prices. d. are better predictors of profit than variable costs.arrow_forwardQuestion-1 The table below shows the short run cost for producing bicycles. Complete all missing values in table below: Marginal cost Average total cost Average variable cost Average fixed cost Total cost Variable cost Fixed cost Output Labor 0 $60 0 0 70$ $60 1 1 $140 $60 6 2 $210 $60 11 3 280$ $60 15 4 $350 $60 13 5 $420 $60 12 6 Draw the short run total cost curve (show the total cost, fixed cost, variable cost). Where the marginal cost and average total cost intercept? Explain the relationship between the marginal cost and the average total cost with the help of graph.arrow_forwardAverage total cost, average variable cost marginal cost and marginal product a. Why is the gap or difference between average total cost and average variable cost larger at initial level of production ction and then the gap is decreasing as output increases? Explain.arrow_forward
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