Exam 6: Production and Cost Analysis in the Long Run

In the case of a short-run production function:

Diseconomies of scale are illustrated by:

Much of the research on the minimum efficient scale suggests that for many firms, economies of scale are:

Graphically, all else constant, a decrease in the price of labor would be illustrated by:

In which of the following situations would consideration of the minimum efficient scale of operation suggest that the market should be served by a single firm to minimize production costs?

The technique that estimates long-run costs and the minimum efficient scale by determining the scale of operation at which most firms in an industry are concentrated is called the:

An increase in the amount of competition with other firms that employ "best practices" would be likely to cause a particular firm's labor productivity to:

Which of the following would have the least amount of influence on a manager's choice of which inputs to employ in a production process?

Which of the following statements about production isoquants is correct?

An increase in the number of people in the United States with health insurance could cause the cost of providing health care services to increase as the incentive for health care providers to minimize costs decreases.

Economies of scale are illustrated by:

Assume a firm produces 500 units of a good by using two inputs, capital and labor, whose per unit prices are $10 and $4. Assume also that the marginal physical product of the last unit of capital is 30 and the marginal physical product of the last unit of labor is 10. To minimize costs this firm should employ:

One of the major motivations for labor resistance to productivity enhancing changes in a production process is the resulting threat to job security.

If the inputs to a production process are perfect substitutes and the marginal rate of technical substitution is equal to the ratio of the prices of the two inputs, the firm can choose from a virtually infinite array of combinations of the two inputs to minimize the costs of producing a given level of output.

Assume a firm is currently employing 20 units of capital and 100 units of labor in its production process. Assume also that the marginal product of the 20^th unit of capital is 40 units of output, the marginal product of the 100^th unit of labor is 10 units of output and the per unit prices of capital and labor are $20 and $10, respectively. In this case, in order to minimize its costs of production the firm should:

All else constant, an improvement in technology at each scale of operation would cause:

Generally speaking, the inclusion of transportation costs in the total costs of production has the effect of causing the LRAC curve to:

When a firm is experiencing economies of scale, the minimum point of the firm's short-run average total cost curve shifts down as it expands its scale of production.

One of the primary sources of diseconomies of scale is the inefficiencies associated with managing large scale operations.

The positively-sloped part of the long-run average total cost curve is due to which of the following?