Exam 8: Cost Functions

A linear total cost curve which passes through the origin implies that:

A firm's economic profits are given by:

A firm whose production function displays increasing returns to scale will have a total cost curve that is:

The cost function Arises from:

Technical progress will:

The expansion path for a homothetic production function:

As long as marginal cost is below average cost,average cost will be:

The Cobb-Douglas production function Yields the cost function (where B is a constant):

For the cost function :

As long as marginal cost is less than average variable cost:

For the cost function Consider the following statements: I.the function exhibits decreasing average cost. II.the function is homogeneous of degree 1 in v and w. III.the elasticity of marginal cost with respect to v exceeds the elasticity with respect to w.

The opportunity cost of producing a bicycle refers to the:

An increase in the wage rate will have a greater effect on average costs:

The average fixed cost curve always has a negative slope because:

The firm's expansion path records:

For any given output level,a firm's long-run costs:

The input demand functions that can be derived from cost functions are referred to as "contingent" demand functions because the functions:

For a constant returns to scale production function:

The shape of a firm's long-run average cost curve is determined by:

In order to minimize the cost of a particular level of output,a firm should produce where: