A- What is the distinction made by economists between the short run and the long run?...

A- What is the distinction made by economists between the short run and the long run? Why is it important?

b. Cite and explain examples from various sized firms and/or various products in the garment industry.

Implicit and Explicit Costs

(a) Why do economists look at implicit costs?

(b) Look at two businesses (one big and one small) and for each identify what might be their implicit costs. Be specific!

PRODUCTION HOMEWORK QUESTIONS

1.What is the marginal product of labor (MP or MPP)? Why is the curve shaped the way it is?

2.Explain and describe each of the four production relationships.

3.Indicate whether each of the following are long-run or short-run choices. Explain why.

A law partnership signs a 5 year lease for an office complex.

A jeans company asks its assembly-line workers to work an extra shift this week.

A local oil refinery plans a complete restructuring of its production process, including relocating the plant.

The local college decides to offer an extra section of micro-economics this summer.

A farmer increases the quantity of water applied to his fields.

The university hires a new football coach on a three year contract.

The corner hot dog vender decides to buy an additional cart.

4.In what two ways can “returns to scale” be used. Give an example of each way.

Solutions

Expert Solution

Rahul Sunny answered 1 year ago

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