Production and Costs in the Long Run 7.4-1 ~ Benjamin Rainwater Flashcards Preview

Econ 2106 Exam 2 > Production and Costs in the Long Run 7.4-1 ~ Benjamin Rainwater > Flashcards

Flashcards in Production and Costs in the Long Run 7.4-1 ~ Benjamin Rainwater Deck (12):
1

The long run is

a time period in which there are no fixed inputs and therefore no fixed
costs.

2

A capital-intensive technology is

one that uses more capital relative to labor.

3

A labor-intensive technology is

one that uses more labor relative to capital.

4

In the short run, almost all the
manufacturing inputs are...

fixed

5

The only variable input is...

labor

6

In the long run, the firm has enough time to
vary all inputs including

factory, equipment,
machinery, tools, and such.

7

In the long run, there are no fixed inputs. True or False?

True

8

In the long run, the firm also gets to choose
the size of its operation. This is called the

scale

9

In the short run, is scale fixed?

yes

10

In the long run, the firm can choose either a
capital-intensive technology or a labor intensive
technology. The choice depends
on what?

relative costs

11

In the short run, the firm can only add or
eliminate...

labor

12

In the long run, a firm faces two decisions: What are those?

(1) the cost-minimizing technique that it wants
to use and (2) the scale or size of operation that it will use.