MicroChapter13 - Rikki Norton Microeconomics Chapter 13...

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Rikki Norton Microeconomics Chapter 13 Questions for Review (1, 2, 3, 5, 8) 1. Economies of scale are the property whereby long-run average total cost falls as the quantity of output increases. Economies of scale normally arise because of high production levels that allow specialization among workers, which allows each worker to become better at a specific task. Diseconomies of scale are the property whereby long-run average total cost rises as the quantity of output increases. Diseconomies usually arise because coordination problems. 2. Both of the two curves would show the curve as rise over run because of the loss of production. 3. A firm’s average total cost curve differs in the short run and the long run because many decisions are fixed in the short run but are variable in the long run. 5. A marginal cost curve for a typical firm would go down to start with but would rise with the quantity of output and a average total cost curve for a typical firm would look like a U in the end. 8. The profit of a firm is equal to total revenue minus total cost. When a firm decides how
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This note was uploaded on 03/14/2011 for the course POLSCI 1123 taught by Professor Thompson during the Spring '11 term at Oklahoma State.

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MicroChapter13 - Rikki Norton Microeconomics Chapter 13...

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