Micro Econ

Question 1

economies of scale

Answer 1

property of the cost function as average cost (AC) falls more output is produced. It’s achieved at the minimum of average cost.

Question 2

property of the cost function as average cost (AC) falls more output is produced. It’s achieved at the minimum of average cost.

Answer 2

economies of scale

Question 3

constant return to scale

Answer 3

double the input = double the output

Question 4

double the input = double the output

Answer 4

constant return to scale

Question 5

Absolute value of slope =

Answer 5

(new wage of rate / rental rate)

Question 6

(new wage of rate / rental rate)

Answer 6

Absolute value of slope =

Question 7

short-run facts

Answer 7

firm can only adjust labor to adjust production level while capital is a fixed variable

Question 8

firm can only adjust labor to adjust production level while capital is a fixed variable

Answer 8

short-run facts

Question 9

long-run facts

Answer 9

capital is flexible and there is no fixed variable

Question 10

capital is flexible and there is no fixed variable

Answer 10

long-run facts

Question 11

Rate of Technical Substitution

Answer 11

Rate at which labor can be substituted for capital to hold output constant = (Wage / Rate of K)

Question 12

Rate at which labor can be substituted for capital to hold output constant = (Wage / Rate of K)

Answer 12

Rate of Technical Substitution

Question 13

cost of production formula

Answer 13

(wages)(units of labor) + (rental rate of k)(unit of k)

Question 14

(wages)(units of labor) + (rental rate of k)(unit of k)

Answer 14

cost of production formula