Question 1

Which of the following would NOT be a short-run decision for the firm?
A)Recall workers who were previously laid-off
B)Have labor work two hours overtime each day in order to expand output
C)Build another wing on the plant in order to add a new assembly line
D)Place an order with a supplier for additional raw materials

Accepted Answer

Building another wing on the plant to add a new assembly line would be a long-term decision as it involves significant capital investment and has long-lasting implications for the firm's production capacity. A short-run decision is typically a temporary decision made to address immediate or current production issues. Therefore, A, B, and D would be short-run decisions as they are related to immediate production needs such as hiring workers, increasing overtime hours, and ordering raw materials.

Question 2

The time period during which a firm's capital is fixed but its labor is variable is called
A)the planning horizon.
B)the short run.
C)the long run.
D)the very long run.

Accepted Answer

In the short run, a firm's capital is fixed because it cannot be easily changed, while its labor is variable because it can be hired and laid off.

Question 3

The time period during at least one input cannot be changed is the
A)production time.
B)calendar year.
C)long run.
D)short run.

Accepted Answer

In economics, the short run refers to a time period in which at least one input cannot be changed. This is because there are some inputs that are fixed or cannot be easily changed in the short run, such as capital equipment, while other inputs like labor can be varied. Therefore, the correct option is D, which refers to short run. A is not correct because production time can vary depending on the type of goods or services being produced. B is not correct because the calendar year is a fixed time period and not related to the inputs in production. C is not correct because the long run refers to a time period in which all inputs are variable and can be changed.

Question 4

During the short run,a firm cannot
A)increase its use of labor.
B)change its plant size.
C)purchase more raw materials.
D)change its variable costs.

Accepted Answer

In the short run, a firm is constrained by its existing plant size and cannot change it. However, it can adjust its variable inputs such as labor and raw materials to increase or decrease output. It can also change its variable costs, such as wages for labor, to some extent.

Question 5

Which of the following is a short-run decision for a firm?
A)Downsizing the firm's manufacturing plant
B)Expanding the firm's distribution network of long-haul freight trucks and smaller delivery trucks.
C)Firing workers
D)Investing in a new addition to the firm's manufacturing plant

Accepted Answer

Firing workers is a short-run decision because it involves immediate cuts to the firm's labor force, while the other options involve long-term investments and changes to the firm's production and distribution capabilities.

Question 6

Mr.James' company produces candy bars.Which is NOT a variable input for this firm?
A)Sugar
B)Assembly line workers
C)The big chocolate-stirring machines
D)Packaging materials

Accepted Answer

The big chocolate-stirring machines are fixed inputs, meaning that they cannot easily and quickly be adjusted based on the level of output the firm desires. The other options listed are variable inputs since the amount of these resources used can be easily adjusted depending on the amount of candy bars the firm plans to produce.

Question 7

The focus of firm decisions in the short run is primarily on
A)variable inputs.
B)capital investment.
C)plant size.
D)economies of scale.

Accepted Answer

In the short run, firms have limited flexibility to adjust their capital investment or plant size. Therefore, their focus is primarily on managing their variable inputs such as labor, raw materials, and energy. Firms will aim to produce at the lowest possible cost given their existing plant size and capital investment, which means optimizing the use of variable inputs.

Question 8

The time period during which all factors of production can be varied is the
A)production time.
B)calendar year.
C)long run.
D)short run.

Accepted Answer

The long run is the time period during which a firm can vary all of its factors of production, including capital and labor. This is in contrast to the short run, during which at least one input is fixed and cannot be adjusted. Therefore, the best choice is C.

Question 9

For a hotdog vendor,the hotdog buns represents his
A)fixed input.
B)variable input.
C)sunk cost.
D)none of the above.

Accepted Answer

The hotdog buns are a variable input because the vendor can choose how many buns to purchase based on how many hot dogs he wants to sell. It is not a fixed input because the vendor can easily adjust the number of buns he buys based on demand. It is also not a sunk cost because the vendor can sell any unsold buns later or use them for another day's sales.

Question 10

In economics,how long is the long run?
A)More than 12 months
B)24 months or longer
C)5 years or more
D)Whatever time it takes a firm to vary all inputs

Accepted Answer

The long run is defined as the period of time in which all factors of production are variable. For firms, this means they can fully adjust their inputs, such as labor and capital. The length of time it takes for a firm to vary all inputs can vary, thus making the long run an uncertain timeframe. Therefore, choice D, "Whatever time it takes a firm to vary all inputs", is the correct answer.

Question 11

For a hotdog vendor,the hotdog stand represents his
A)fixed input.
B)variable input.
C)diseconomies of scale.
D)none of the above.

Accepted Answer

The hotdog stand represents the fixed input for the hotdog vendor because it is a long-term, durable asset that cannot be easily or quickly changed in response to changes in demand or production. The vendor cannot easily increase or decrease the size or capacity of the stand, but must instead adjust the number of hotdogs, buns, condiments, etc. that he has available to sell.

Question 12

Which of the following would be a fixed input for an amusement park?
A)Ticket takers
B)Unpopped popcorn
C)Concession workers
D)The roller coaster

Accepted Answer

The fixed input for an amusement park is something that cannot be easily changed or adjusted in the short term. The roller coaster is a physical structure that cannot be easily moved or altered, unlike the ticket takers, popcorn, and concession workers which can be adjusted based on demand.

Question 13

A basic distinction between the long run and the short run is that
A)if a firm produces no output in the long run,it still incurs a cost.
B)the opportunity costs of production are lower in the short run than in the long run.
C)in the long run,some inputs are fixed,while in the short run,all inputs are variable.
D)in the short run,complete adjustment of all inputs is impossible,while in the long run all inputs can be adjusted.

Accepted Answer

In the short run, at least one input is fixed, limiting the firm's ability to adjust production levels. In the long run, all inputs are variable, allowing for complete adjustment to changes in the market or production needs.

Question 14

A fixed resource is one that
A)is physically tied to a specific location.
B)costs more than the average daily revenue of the firm.
C)cannot be varied in the short run.
D)can be disposed of only if the firm goes out of business.

Accepted Answer

A fixed resource is one that cannot be varied in the short run. This means that it is not easily changed or adjusted in response to changes in demand or other factors. Examples of fixed resources include the physical space of a factory or retail store, the size of a fleet of delivery trucks, or the number of employees on staff. These resources are typically expensive to acquire and difficult to dispose of if the firm decides to make changes.

Question 15

Ajax Corporation has recently finished building a new factory.They moved into the factory a month ago and found that it is the perfect size given the amount they want to produce.Ajax is operating in the
A)production time.
B)corporation time.
C)long run.
D)short run.

Accepted Answer

The long run refers to a period of time in which a firm can adjust all of its inputs (such as plant size or workforce) to achieve a desired level of output. Since Ajax recently built a new factory and is able to adjust its production level, they are operating in the long run.

Question 16

Economists generally define the short run as being
A)that period of time in which at least one of the firm's inputs,usually plant size,is fixed.
B)that period of time in which all inputs are variable.
C)any period of time less than one year.
D)any period of time less than six months.

Accepted Answer

The short run is typically defined as the period of time in which at least one of the inputs in production is fixed, while the others are variable. This is often the plant size, as it is difficult to quickly adjust the size of a plant in response to changes in demand or production needs. The other options given are not as accurate, as the short run is not necessarily defined as any specific length of time, but rather by the variable inputs within that time frame.

Question 17

Which of the following is TRUE about the long run?
A)All resources are variable.
B)All resources are fixed.
C)At least one resource is fixed.
D)None of the above.

Accepted Answer

In the long run, all resources are variable because firms have the opportunity to adjust their inputs such as labor, capital, and technology to optimize production and minimize costs.

Question 18

The long run is defined as the time period in which
A)the firm can vary only one input.
B)the firm can make positive economic profits.
C)all factors of production can be altered.
D)the firm can alter its rate of production.

Accepted Answer

In the long run, all factors of production can be altered or adjusted. This includes the ability to change the amount of labor, capital, and land used in production. This allows the firm to adjust to changes in the market and optimize their production process for maximum efficiency and profitability. In the short run, at least one factor of production is fixed, usually capital, and the firm is unable to make significant changes to their production process.

Question 19

Which of the following would be a fixed input to an automobile firm?
A)Steel
B)A factory in Detroit
C)Car batteries
D)Engineers

Accepted Answer

The answer of Which of the following would be a...

Question 20

The short run is
A)a year or less.
B)up to three years.
C)the period of time in which the firm can vary its rate of output.
D)the period of time in which the firm cannot change its use of at least one input.

Accepted Answer

The short run is defined as the period of time in which the firm cannot change its use of at least one input. This means that the firm is constrained in its production decisions, which can have implications for its cost structure and profitability. The length of the short run can vary depending on the industry and specific circumstances but is generally less than three years.

Quiz 9: The Firm: Cost and Output Determination

Which of the following would NOT be a short-run decision for the firm?

The time period during which a firm's capital is fixed but its labor is variable is called

The time period during at least one input cannot be changed is the

During the short run,a firm cannot

Which of the following is a short-run decision for a firm?

Mr.James' company produces candy bars.Which is NOT a variable input for this firm?

The focus of firm decisions in the short run is primarily on

The time period during which all factors of production can be varied is the

For a hotdog vendor,the hotdog buns represents his

In economics,how long is the long run?

For a hotdog vendor,the hotdog stand represents his

Which of the following would be a fixed input for an amusement park?

A basic distinction between the long run and the short run is that

A fixed resource is one that

Ajax Corporation has recently finished building a new factory.They moved into the factory a month ago and found that it is the perfect size given the amount they want to produce.Ajax is operating in the

Economists generally define the short run as being

Which of the following is TRUE about the long run?

The long run is defined as the time period in which

Which of the following would be a fixed input to an automobile firm?

The short run is