Which of the following physical relationships might generate economies of scale?
A) Proportionally larger pipes can transport more than a proportional increase in oil.
B) Larger equipment tends to weigh more and use more fuel on a per-unit-of-output basis.
C) Each lift truck requires one lift truck driver.
D) A doubling of all inputs leads to a doubling of output.
Answer: A
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You have decided that you are going to consume 600 calories of beer and snacks at a party Saturday night. A beer has 150 calories and a snack has 75 calories
a. Create a table that shows the various combinations of beer and snacks you can consume. To keep things simple, use only round numbers (e.g., you could choose 1 or 2 beers but not 1.5 beers). b. What is the opportunity cost of a beer?
Which of the following is true with regards to a long-run cost function?
a. The shape of the firm's long-run cost function is important in decisions to expand the scale of operations b. The long-run average cost curve is U-shaped c. The long-run average cost curve is flatter than the short-run average cost curve. d. The curve consists of the lower boundary of all the short-run cost curves e. All of the above