Question : 61) Which of the following paired concepts equivalent to each : 1384213

61) Which of the following paired concepts are equivalent to each other?

A) constant costs; economies of scale

B) increasing returns; decreasing costs

C) increasing returns; increasing costs

D) increasing costs; economies of scale

E) increasing returns; diseconomies of scale

62) Which of the following paired concepts are equivalent to each other?

A) constant costs; economies of scale

B) decreasing returns; decreasing costs

C) increasing returns; increasing costs

D) decreasing costs; economies of scale

E) increasing returns; diseconomies of scale

63) Of the following, which is the least likely to represent a firm’s long-run decision?

A) What should be the size and design of a firm’s new plant?

B) Should the firm choose a method of production that uses relatively more capital than labour?

C) By how much should output be expanded from existing plants?

D) Should the firm invest resources in the development of better technologies?

E) What technique (technology) is the best to use under current factor pricing?

64) The long-run average cost curve is an envelope curve, with each point associated with a short-run average cost curve

A) tangent at that point.

B) crossing that point from above.

C) lying below it.

D) intersecting that point.

E) at its minimum point.

65) The point of tangency between the short-run average total cost (SRATC) curve and the long-run average cost (LRAC) curve occurs

A) at the point of minimum SRATC.

B) at a point where average total cost is falling but the marginal cost is rising.

C) at a point where both the average total cost and the marginal cost are rising.

D) at an output level for which the quantity of the fixed factor is optimal.

E) only when the LRAC curve is at its minimum.

66) In the long run, decreasing returns to scale are likely to be caused by

A) diseconomies of scale associated with management problems.

B) a decrease in factor prices.

C) increasing specialization of labour.

D) diminishing returns to the variable factor.

E) decreasing costs.

67) Which of the following statements concerning long-run and short-run cost curves is correct?

A) A short-run average cost curve can fall below the long-run average cost curve.

B) The short-run average cost curve is tangent to the long-run average cost curve for all levels of output of the fixed factor.

C) The long-run average cost curve envelops a whole family of short-run marginal cost curves.

D) The minimum point of the long-run average cost curve will correspond to the minimum point on a single short-run average cost curve.

E) Both the long-run and short-run average cost curves show the lowest cost of producing any output when all factors are variable.

68) A short-run average total cost curve will touch the long-run average cost curve at a level of output only

A) where the short-run cost curve is downward sloping.

B) where the short-run cost curve is upward sloping.

C) when the quantity of the fixed factor being employed is at the optimal level for that level of output.

D) where the short-run cost curve is downward-sloping and the quantity of the fixed factor is optimal.

E) by coincidence.

69) Consider the short-run and long-run cost curves for a firm. If factor prices decrease,

A) the firm will move down along both its long-run and short-run average cost curves.

B) the firm will move down along its long-run average cost curve only.

C) both the long-run and short-run average cost curves will shift downward.

D) there will be a downward shift in the long-run average cost curve but not in the short-run average cost curve.

E) there will be no change in the cost curves in the long run.

70) A downward-sloping LRAC curve will shift downward because of

A) specialization.

B) a decrease in factor prices.

C) the use of large, specialized machinery as the volume of output increases.

D) factor substitution.

E) economies of scale.