Question

In: Economics

- A curve showing the lowest cost at which a firm is able to produce a...

- A curve showing the lowest cost at which a firm is able to produce a given level of output in the long run is

a) a long-run average total cost curve.

b) a minimum efficient scale curve.

c) a long-run production function.

d) a long-run marginal cost curve.

- The slope of an isocost line determines the marginal rate of substitution.

a) True

b) False

- The slope of an isoquant is equal to the ratio of the price of the input on the horizontal axis divided by the price of the input on the vertical axis, multiplied by -1.

a) True

b) False

Expert Solution

Option

a) a long-run average total cost curve.

==

LRATC is the curve that shows a combination of the lowest cost and output level.

The minimum efficient scale is a point on short-run ATC.

LRMC shows the cost of the next unit produced.

===

Q2

False

Isocost slope denotes the relative price of inputs as it is the ratio of input price that is w/r.

==

Q3

Option

False

The isoquant slope determines the marginal rate of substitution and it is the ratio of marginal product of the inputs.

Rahul Sunny answered 2 years ago

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