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Question 29 if cost per unit is rising with larger plant size, in the long run average cost curve we are in the positive returns to scale we are in

Question 29

if cost per unit is rising with larger plant size, in the long run average cost curve

we are in the positive returns to scale

we are in the diseconomies of scale

we are in the economies of scale

we are in the constant returns to scale

 

Question 30

 If MPL/PL > MPK/PK, a profit-maximizing firm should

(MPL is marginal product of labor, MPK is marginal product of capital, PL is price of labor, PK is price of capital)

use more capital

decrease the output level

use more labor

increase the output level

 

Question 31

if Productivity rises

marginal product falls

cost per unit rises

prices will rise

cost per unit falls

 

Question 32

For a perfectly competitive firm, if the minimum average total cost is $50 and the minimum average variable cost is $30, if the selling price is $43, the firm

should close permanently

makes a loss but stays open

should temporarily close

should close until the price goes above $50

Top Answer

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