Theoretically, in a long-run cost function:
a. all inputs are fixed
b. all inputs are considered variable
c. some inputs are always fixed
d. capital and labor are always combined in fixed proportions
e. b and d
QUESTION 2In the problem of double marginalization, the resulting price is higher than if
a. The manufacturer were to sell directly to the consumer
b. The manufacturer and the retailer were to merge
c. All of the above
d. None of the above
QUESTION 3An increase in the US demand for pound causes
a. An appreciation of the pound
b. Depreciation in the dollar
c. None of the above
d. Both a and b
QUESTION 4The short-run cost function is:
a. where all inputs to the production process are variable
b. relevant to decisions in which one or more inputs to the production process are fixed
c. not relevant to optimal pricing and production output decisions
d. crucial in making optimal investment decisions in new production facilities
e. none of the above
QUESTION 5In the problem of double marginalization, the resulting price is ______than if the manufacturer and the retailer were to merge
a. Higher
b. Lower
c. The same
d. None of the above
QUESTION 6Holding other things constant, a decrease in the inflation rate in the US compared to the Canadian economy may cause the demand for dollar to _____________ and the supply for dollar to __________.
a. Increase; decrease
b. Increase, increase
c. Decrease; Increase
d. Decrease; Decrease
QUESTION 7Evidence from empirical studies of long-run cost-output relationships lends support to the:
a. existence of a non-linear cubic total cost function
b. hypothesis that marginal costs first decrease, then gradually increase over the normal operating range of the firm
c. hypothesis that total costs increase quadratically over the ranges of output examined
d. hypothesis that total costs increase linearly over some considerable range of output examined
e. none of the above
QUESTION 8In the problem of double marginalization, the resulting price is ______than if the manufacturer were to sell directly to the consumer
a. Higher
b. Lower
c. The same
d. None of the above
Quick Reply
