Question :
91) Although capital a variable factor in the long run, : 1384216
91) Although capital is a variable factor in the long run, once chosen it becomes a fixed factor for a long time. A profit-maximizing firm must therefore select a method of production that is
A) economically efficient at current factor prices.
B) technologically advanced beyond methods currently used.
C) labour intensive, as labour is always a variable factor.
D) economically efficient at current factor prices and sufficiently flexible to adapt to changing factor prices over time.
E) adaptable to wide ranges of output over time.
92) The fact that new methods to extract oil are developed as oil prices increase suggests
A) that methods of production do not change in response to factor-price changes.
B) that invention is exogenous.
C) that invention does respond to economic signals and is endogenous.
D) that oil has many close substitutes.
E) nothing; changes in technology occur regardless of market prices.
93) The creation of a new product is called
A) process innovation.
B) a rise in productivity.
C) creative destruction.
D) investment.
E) product innovation.
94) Suppose RioTintoAlcan is considering the construction of a new aluminum smelter in Northern Quebec, the operation of which requires a great deal of electricity. Suppose also that the price of electricity is predicted to rise significantly in the near future. As a result, the firm decides to build a plant using existing technology that is more expensive but uses less electricity per tonne of aluminum produced. This behaviour is an example of
A) short-run profit maximization.
B) short-run cost minimization.
C) the long-run principle of substitution.
D) innovation away from changes in factor prices.
E) long-run economies of scale.
95) Suppose RioTintoAlcan is considering the construction of a new aluminum smelter in Northern Quebec, the operation of which requires a great deal of electricity. Suppose also that the price of electricity is predicted to rise significantly in the near future. As a result, the firm decides to embark on new research and development which leads to the development of a new production technique that uses less electricity per tonne of aluminum produced. This is an example of
A) the marginal rate of substitution between factors.
B) innovation away from increases in factor prices.
C) short-run cost minimization.
D) short-run profit maximization.
E) long-run economies of scale.
96) Suppose Commercial Footware Inc. is making a cost-minimizing decision about the level of output to produce with a given technology. Which of the following is a long-run decision?
A) Should we build a larger shoe manufacturing facility?
B) Should we hire additional labour to work in the existing facility?
C) Should we change to a lower-cost leather supplier?
D) Should we invest in research for a new, improved technology for shoe production?
E) Should we hire more accountants to investigate ways to reduce our corporate tax payments?
97) Which of the following statements most accurately makes the distinction between the long run and the very-long run with respect to the long-run average cost (LRAC) curve?
A) In the long run, the LRAC curve is shifting down, whereas in the very-long run the firm is moving along the existing LRAC curve.
B) In the long run, the firm is moving along the existing LRAC curve, whereas in the very-long run, the LRAC curve is shifting down.
C) In the long run, the LRAC curve is shifting up, whereas in the very-long run the firm is moving along the existing LRAC curve.
D) In the long run, the firm is moving along the existing LRAC curve, whereas in the very-long run, the LRAC curve is shifting up.
E) There is no distinction between the long run and the very-long run with respect to the LRAC curve.
98) What information is displayed by an isoquant?
A) the whole set of technically efficient factor combinations that can produce varying levels of output
B) various levels of output that can be produced with different factor combinations
C) various levels of output that can be produced with a fixed factor combination
D) the whole set of technically efficient factor combinations that can produce a single level of output
E) the alternative factor combinations that require the same expenditure
99) The slope of an isoquant measures
A) the marginal rate of (technical) substitution between factors.
B) the average capital/labour ratio.
C) the marginal cost of a given level of output.
D) the ratio of prices of inputs.
E) the ratio of prices of goods.
100) Movement from one point to another along an isoquant implies a change in
A) output levels, holding factor combinations constant.
B) factor combinations, holding output constant.
C) product prices.
D) the level of output, independent of what happens to factor combinations.
E) money income.
Submit file using Webcam PhotoWebcam PhotoSubmit file using Canvas FilesCanvas Files