York University - ECON 1000Testbank Chapter 11 Output and Costs ( ALL ANSWERS CORRECT )

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Chapter 11 Output and Costs 11.1 Decision Time Frames 1) The short run is a time frame in which A) the firm is not able to hire more workers. B) the amount of output produced is fixed. C) there i... s a shortage of most factors of production. D) at least one factor of production is fixed. E) there is not enough time to make all of the decisions necessary to maximize profit. Answer: D Diff: 1 Type: MC Topic: Decision Time Frames 2) The long run is a time frame in which A) the firm can hire all the workers it wants to employ, but it does not have sufficient time to buy more equipment. B) the firm is able to maximize revenue. C) the firm may want to build a bigger plant, but cannot do so. D) economic efficiency is achieved. E) the quantities of all factors of production can be varied. Answer: E Diff: 1 Type: MC Topic: Decision Time Frames 3) Plant refers to those factors of production A) that are too expensive for the firm to purchase. B) that must be held in storage for at least one year. C) that are fixed in the short run. D) that have a decreasing marginal product as more of the factor is used. E) which can be purchased only in fixed quantity lots. Answer: C Diff: 1 Type: MC Topic: Decision Time Frames 4) The short run refers to a time period A) of one year or less. B) in which all factors of production are variable. C) in which all factors of production are fixed. D) in which some factors of production are variable, but at least one factor of production is. E) in which all factors of production are variable, but the technology is fixed. Answer: D Diff: 1 Type: MC Topic: Decision Time Frames Source: Study Guide 1995) The long run refers to a time period A) of one year or less. B) in which all factors of production are variable. C) in which labour is variable, but plant is fixed. D) when there is at least one variable factor of production. E) of at least 5 years. Answer: B Diff: 1 Type: MC Topic: Decision Time Frames 6) Choose the correct statement. A) The long run is a period of time in which the quantity of at least one input is fixed. B) The short run is a period of time in which the firm has sufficient time to change all its inputs. C) The long run is a time frame that lasts for 10 years. D) In the short run, the firm's plant is fixed. E) A firm always has plenty of time to make decisions about changing its inputs no matter if it is in a short run or long run position. Answer: D Diff: 1 Type: MC Topic: Decision Time Frames Use the information below to answer the following questions. Fact 11.1.1 January 31, 2008: Starbucks will open 75 more stores abroad than originally predicted, for a total of 975. February 25, 2008: For three hours on Tuesday, Starbucks will shut down every single one of its 7,100 stores so that baristas can receive a refresher course. June 2, 2008: Starbucks replaces baristas with vending machines. July 18, 2008: Starbucks is closing 616 stores by the end of March. 7) Refer to Fact 11.1.1. The decisions made on ________ are short-run decisions because they ________. A) January 31 and July 18; change the number of stores but not necessarily the number of employees B) February 25 and June 2; change a variable factor of production but not a fixed factor of production C) February 25, June 2, and July 18; deal with stores located in the United States D) June 2 and July 18; are the more recent decisions E) None of the above. Answer: B Diff: 1 Type: MC Topic: Decision Time Frames Source: MyEconLab [Show More]

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