Cost part 2

In Long run both L and K are _________

• Fixed

• Adjustable

The Isocost line is sloped ________

• negatively

• Positively

A movement from A to B in the figure represents:

• economies of scope.

• diseconomies of scale.

• economies of scale.

• Economic of learning.

Input costs that may not have a direct outlay of money.  Value of the opportunity cost.

• Fixed Cost
• Variable Cost
• Implicit Cost
• Explicit Cost

Period of time in which all costs are variable.

• Long Run
• Short Run

in the short run, when the output of a firm is zero

• variable cost will be zero

• the total cost will be zero

• none of the costs will be zero

• all costs will be zero

At the cost-minimizing point, the isocost line are ________ to the
isoquant.

• parallel

• tangent

• negative

• positive

What is the formula for the slope of the isoquant in the context of cost minimization?

• MRTS = MPL / MPK

• MRTS = w / r

• MRTS = -w / r

• MRTS = -MPL / MPK

What does the slope of the isocost line represent in cost minimization?

• The level of output the firm intends to produce.

• The firm's total cost of production.

• The ratio of wage rate (w) to the rental rate for capital (r).

• The rate at which the firm can substitute one input for another while minimizing costs.

In increasing returns to scale, doubling the output leads to less than doubling the cost and hence ATC is

• upward sloping

• downward sloping

• constant