Review Chapters 6 and 7

Review Chapters 6 and 7 - Review Chapters 6 and 7 Multiple...

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Review Chapters 6 and 7 Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. If a firm’s production process exhibits increasing returns to scale, then its long-run: a. marginal cost and average cost are equal to each other, and neither varies with output. b. marginal cost falls with output, average cost does not vary with output, and marginal cost exceeds average cost. c. marginal cost does not vary with output, average cost falls with output, and average cost exceeds marginal cost. d. marginal cost and average cost both fall with output, and average cost exceeds marginal cost. e. marginal cost does not vary with output, average cost rises with output, and marginal cost exceeds average cost. ____ 2. If a firm increases its output in the long run and its long-run average costs declines, this represents evidence that a. economies of scale exist. b. diseconomies of scale exist. c. diminishing returns have set in. d.
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Review Chapters 6 and 7 - Review Chapters 6 and 7 Multiple...

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