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In: Economics

2. Which of the following costs are always increasing as output increases? (a) Variable Cost only...

2. Which of the following costs are always increasing as output increases? (a) Variable Cost only (b) Fixed Cost only (c) Marginal Cost only (d) Total Cost only (e) Total Cost and Variable Cost

3.A firm has a Cobb-Douglas production function ? = 50√ ??. This function exhibits a constant return to scale. The total cost function for this production process is ? ? = ? · √ ?·? 50 , where ? is output level, ? and ? are prices of labor and capital. The marginal cost of production for this function is: (a) Constant. (b) Increasing. (c) Decreasing. (d) None of the above.

4. If some production function ?(?, ?) exhibits an increasing return to scale, then the marginal cost of production decreases as output level increases. (a) True. (b) False. (c) Not enough information given. (d) None of the above.

5. It will never cost more to produce a certain amount of output in the long run than in the short run. (a) True. (b) False. (c) Not enough information given. (d) None of the above.

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Rahul Sunny answered 6 months ago
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