Question 04. The firm\'s expansion path records a. The profit maximizing output

Question

Question 04. The firm's expansion path records a. The profit maximizing output choices for every possible input price combination. b. The cost-minimizing input choices for every possible input price combination. c. The cost-minimizing input choices for every possible output level while keeping input prices fixed d. Ihe cost-Immizing input choices for every possible output price level while keeping input prices fixed. Question 05 Suppose a firm's production function improves at a rate of 3% each year. This technological progress Shift the firm's cost curve downward a. b. Not affect the firm's cost curve c. Shift the firm's production function downward d. Question 06. For the cost function C 1000.3q, which of the following is true: a. None of the above b. C. d. Marginal cost is constant. Average cost is U-shaped Fixed cost -0.3 All of the above

Explanation / Answer

Question 4

Expansion path represents the least-cost combination of factors of production corresponding to various level of output keeping the price of inputs fixed.

So, the firm's expansion path records the cost-minimizing inout choices for every possible output level while keeping input prices fixed.

Hence, the correct answer is the option (c).

Question 5

Technological progress enable the firm to produce more output with same set of inputs thus cost of production declines.

This decline in cost of production shifts the firm's cost curve downward.

Hence, the correct answer is the option (a).

Question 6

Cost function is as follows -

C = 100 + 0.3q

0.3q represents variable cost

This indicates that each successive increase in output by 1 unit, increases variable cost by 0.3.

Increase in variable cost is the marginal cost.

So, each time marginal cost increases by 0.3.

Thus, marginal cost is constant.

Hence, the correct answer is the option (a).

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---