Multiple Choice
A firm is currently producing 1140 units of output according to the production function q = L4/3K1/2 and faces input prices equal to w = $20 and r = $80.In the short run,capital is fixed at 5 units.In the long run,the firm's costs are
A) lower because the firm substitutes towards more labor and away from capital.
B) lower because the firm substitutes towards more capital and away from labor.
C) higher because the firm substitutes towards more labor and away from capital.
D) higher because the firm substitutes towards more capital and away from labor.
Correct Answer:
Verified
Correct Answer:
Verified
Q61: The marginal cost curve intersects the average
Q62: Suppose MP<sub>L</sub> = 0.5 ∗ (q/L)and MP<sub>K</sub>
Q63: The tangency points between the long-run average
Q64: Joey's Lawncutting Service rents office space from
Q65: If Option A costs $40 and yields
Q67: Suppose the total cost of producing T-shirts
Q68: A firm produces output according to the
Q69: The cost of waiting two months for
Q70: The "Law of Diminishing Marginal Returns" could
Q71: Suppose the cost of producing two goods,x