In the short run: A. all inputs are fixed 5. B. all inputs are variable. C. some
ID: 1121111 • Letter: I
Question
In the short run: A. all inputs are fixed 5. B. all inputs are variable. C. some inputs are fixed and some inputs are variable. D. all costs are variable 6. Diminishing marginal returns occur when: each additional unit of a variable factor adds more to total output than the previous unit. A. B. an additional variable factor adds less to total output than the C. the marginal product of a variable factor is increasing but at a D. total product decreases. previous unit. decreasing rate. 7. Which of the following cost concepts is correctly defined? B. C. D. ATC VC + FC ATC=AVC+AFC TC=AVC + AFC Use the following to answer question 15: Table: Production Function for Soybeans Quantity of labor (workers) Quantity of soybeans (bushels) 0 25 45 60 70 75 5Explanation / Answer
Question 5
Short-run refers to the time period with respect to production process in which quantity of some inputs is taken as fixed or constant while quantity of some inputs is taken as variable or changeable.
In other words, in short-run, quantity of some inputs do not change as output produced changes while quantity of some inputs changes as output produced changes.
The correct answer is the option (C).
Question 6
Diminishing marginal returns implies lesser and lesser addition to the total output with each successive increase in quantity of variable input.
The correct answer is the option (B).
Question 7
The corrected form of given identities are as follows -
MC = TC/Q
ATC = TC/Q
ATC = AVC + AFC
TC = TFC + TVC
The above stated corrected identities shows that only third identity was correctly classified in the given question.
The correct answer is the option (C).