Exam 8: Cost Functions

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

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

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

For a constant returns to scale production function

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

The average fixed cost curve always has a negative slope because

A firm's economic profits are given by

The expansion path for a homothetic production function

The firm's expansion path records

Technical progress will

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

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

The opportunity cost of producing a bicycle refers to the

The Cobb-Douglas production function $q = k ^ { ~.5 } l ^ {~ .75 }$ yields the cost function C = (where B is a constant).

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

The cost function $C = Q \left[ v ^ { 1 / 2 } + w ^ { 1 / 2 } \right] ^ { 2 }$ arises from

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

For the cost function C = 100 + .3q,

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

For the cost function $C = q ^ { \cdot 8 }~~ v ^ { .4} ~~w ^ { .6 }$ 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.