Exam 7: Costs in the Long Run

Which of the following is correct in reference to the long run?

Suppose a firm builds a larger plant and increases its output.Which of the following statements is correct?

Assume that a firm's total cost of producing an output of 1,000 units is currently $20,000.If output increases to 2,000 units,total cost increases to $40,000 and the price of inputs and technology remain unchanged,calculate the change in average total cost.

Which of the following is the most likely cause of diseconomies of scale?

Suppose that a firm,operating efficiently,doubles the size of its operations and discovers that,as a result,its average cost of production has fallen.What does this imply?

Suppose it takes 50 workers and 80 units of capital to product 400 televisions a day.If 55 workers and 88 units of capital are involved in producing 444 units of televisions a day,is the firm experiencing increasing returns to scale,constant returns,or decreasing returns to scale?

-Refer to the graph above to answer this question.Could this firm produce an output of 200 at an average total cost of $30?

All of the following,except one,are examples of pecuniary economies of scale.Which is the exception?

In what sense might a firm be too small?

-Refer to Figure 7.7 to answer this question.All of the following statements,except one,are correct.Which is the exception?

-Refer to the graph above to answer this question.All of the following statements except one is correct.Which is the exception?

Below is short-run cost data for four different plant sizes.Plant 2 has exactly twice as many inputs as does Plant 1.Plant 3 has exactly three times as many inputs as does Plant 1 and Plant 4 has exactly four times as many inputs as does Plant 1. -Refer to the information above to answer this question.Which of the following statements about the shape of the LRAC curve is correct?

List three factors that will decrease both the short-run and long-run average cost curves.

In the graph below six short-run average cost curves labeled a through f are illustrated. -Refer to the graph above to answer this question.Which set of short-run average cost curves illustrates constant returns to scale?

Graphically,what is the effect of technological change?

Which of the following statements is correct?

Which of the following statements is correct if a firm's capacity output increases from 400 to 800 and its total costs rise from $60,000 to $110,000?

All of the following,except one,are reasons for economies of scale to be present in production.Which is the exception?

The table below shows cost data for three different-sized plants---1,2,and 3---which are the only three plants possible.

Below is short-run cost data for four different plant sizes.Plant 2 has exactly twice as many inputs as does Plant 1.Plant 3 has exactly three times as many inputs as does Plant 1 and Plant 4 has exactly four times as many inputs as does Plant 1. -Refer to the information above to answer this question.What is the best plant to use for an output of 25?