Reading 17: Output and Costs LOS a习题精选 between, following, statements, 2010

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LOS a: Differentiate between short-run and long-run decision time frames.

Which of the following statements about the short-run and long-run decision time frames is most accurate?

A) In the long run, a firm can adjust its input quantities, production methods, and plant size.

B) In the long run, quantities of some resources are fixed.

C) In the short run, technology of production is variable.

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In the short run, quantities of some resources, including technology of production, are fixed. Typically, economists treat labor and raw materials as variable, holding plant size, the amount of capital equipment, and technology constant. In the long run, all factors of production are assumed to be variable.

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A firm realizes that it is producing more than the profit maximizing level of output and makes a short-run decision to decrease its output. Which of the firm’s cost measures is least likely to decrease as a result?

A) Average variable cost.

B) Marginal cost.

C) Average fixed cost.

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A short-run decrease in output will cause a firm’s average fixed costs to increase because its fixed costs are spread over a smaller number of units. In terms of cost curves, average fixed cost never slopes upward, so a decrease in output never reduces average fixed costs. The average variable cost, average total cost, and marginal cost curves all have upward sloping components along which a lower level of output would result in a lower cost.

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Which of the following two factors are most likely to be considered variable during the short run?

A) Labor and technology.

B) Raw materials and technology.

C) Labor and raw materials.

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Of the sets of factors listed, the two that are typically considered variable in the short run are labor and raw materials.

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The short run is best defined as:

A) the period for which the quantities of some resource inputs are fixed.

B) the period for which the quantities of all factors of production are fixed.

C) the time frame within which working capital decisions cannot be altered.

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The short run is typically defined as the period for which the quantities of some, but not all, resources are fixed. Working capital is the difference between a firm’s current assets and current liabilities and consists of items (such as cash) that the firm can adjust in the short run.

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Which of the following factors of production is least likely to be fixed in the short run?

A) Labor.

B) Technology.

C) Plant size.

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Labor is typically assumed to be variable in the short run.