# Eco 6418

### 32 terms by jiggaman2000

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### Sources of economies scale include all except the following:

all of the above are sources of scale economies

### The smallest output at which long run average cost is minimized is

The point at which minimum efficient scale is reached

### Scope economies are said to rely on which of the following strategies?

Diversifying into related products

### A production function is a table, a graph, or an equation showing the

maximum output that can be achieved from specified levels of inputs.

### Costs increase as a firm shortens the development horizon because

A. more tasks must be undertaken concurrently; this lessens the amount of learning that can be incorporated

### The long run is a time period during which

all inputs are variable.

### A production function is a table, a graph, or an equation showing the

maximum output that can be achieved from specified levels of inputs.

### The average product of labor is defined as the

output divided by the labor input usage

### The marginal product of labor is defined by the

change in output divided by the change in labor input usage.

### The marginal product of labor can be illustrated geometrically as the

slope of the total product curve with respect to labor.

### Average variable cost is equal to the

total variable cost divided by the level of output.

### Whenever average variable cost is declining with increases in output,

marginal cost at first decreases and then increases with output

### Whenever marginal product is declining with increasing use of an input,

total product is increasing at a decreasing rate as input use increases

### When average product is at a maximum, marginal product is

equal to average product.

### Whenever average product is declining with increases in input usage,

marginal product is less than average product

### Diminishing marginal returns

are consistent with increasing returns to scale

### Break-even analysis usually assumes

average variable costs are constant.

### The opportunity cost of a firm's inputs

is the value of the inputs in their most highly valued alternative use.

### If average variable cost is increasing with increases in output, total fixed cost will

remain unchanged with increases in output.

marginal cost.

### Short-run marginal cost eventually increases with increasing output because

eventually marginal returns will diminish.

### When average variable cost is at its minimum,

marginal cost is less than average total cost.

### The long-run average cost curve slopes upward if there are

diseconomies of scale

sunk cost

### When setting rates that natural monopolists can charge, regulatory commissions attempt to establish a maximum price

where price equals average variable cost plus a fair return on invested capital of monopolist.

### Which of the following is true about an unregulated monopolist?

It will never allow its price to be in the inelastic portion of the industry demand curve.

### Many sellers of a differentiated product are associated with which market structure?

Monopolistic Competition

oligopolistic.

### In the model of monopoly, firms produce a

differentiated product with considerable control over price.

### A decreasing-cost industry is one in which

input prices fall or technology improves as firms enter the industry.

### Oligopoly is a market structure that necessarily has

a small number of firms but more than one.

### Oligopoly is the only market structure in which one finds

firm interdependence.

Example: