HOMEWORKS Flashcards
1
Q
What are Economic Costs?
A
Accounting Costs + Opportunity Costs
2
Q
What role does the LDR play in the short and long run?
A
SR - LDR eventually leads to a decrease in MP LR - No effect
3
Q
What distinguishes LR and SR?
A
SR - Fixed inputs LR - All inputs are variable
4
Q
What does the slope of a ray from the origin to the TP curve measure?
A
Average Product
5
Q
On an isoquant, MRTS(L for K) = ?
A
MP(L)/MP(K)
6
Q
What shows the relative price of inputs?
A
Isocost lines
7
Q
In the Short Run, technology is ?
A
Constant
8
Q
When MC > AC, AC must be ?
A
Rising (grades example)
9
Q
If the MP(L) is declining, TVC is ?
A
Increasing at an increasing rate
