Question

In the case of a short-run production function:

A) all of the inputs are variable.

B) the amount of labor employed is held constant.

C) at least one of the inputs is fixed.

D) all of the inputs are fixed.

Answer:

2) X-inefficiency refers to the situation in which:

A) highly competitive firms have less incentive to minimize their costs of production than other firms because the highly competitive firms have almost no chance to earn above-average profits.

B) firms are unable to minimize their costs of production because there is no potential for input substitution.

C) firms that use labor-intensive production methods tend to be less efficient than firms that use capital-intensive production methods.

D) firms with market power have less incentive to minimize their costs of production than more competitive firms.

Answer:

3) Economies of scale are illustrated by:

A) a downward sloping long-run average cost curve.

B) a flat long-run average cost curve.

C) an upward-sloping long-run average cost curve.

D) a downward-sloping sh

Answer 1