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constant costs increasing returns to scale constant returns to scale isocost cur

ID: 2495501 • Letter: C

Question

constant costs

increasing returns to scale

constant returns to scale

isocost curve

decreasing returns to scale

isoquant

diseconomies of scale

long-run average cost

economies of scale

long-run marginal cost

economies of scope

marginal rate of technical substitution

expansion path

short-run expansion path

___A curve that displays all the various combinations of inputs that will produce a given amount of output.

___The rate at which one input is substituted for another along an isoquant.

___Line that shows all the possible combinations of inputs that can be purchased for a given total cost.

___A curve showing all of the cost-minimizing levels of input usage for various levels of output.

___When the usage of all inputs is increased by an equal proportionate amount, output ___increases by exactly the same proportion.

___When the usage of all inputs is increased by an equal proportionate amount, output increases by a larger proportionate amount.

___When the usage of all inputs is increased by an equal proportionate amount, output increases by a smaller proportionate amount.

___Cost per unit in the long run.

___The change in long-run total cost per unit change in output.

___When long-run average cost falls as output increases.

___When long-run average cost increases with increases in output.

___Long-run average and marginal costs are equal for all levels of output.

___The situation in which the joint cost of producing two goods is less than the sum of the separate costs of producing the two goods.

___Horizontal line showing the cost-minimizing input combinations for various output levels when capital is fixed in the short run.

Explanation / Answer

isoquant-A curve that displays all the various combinations of inputs that will produce a given amount of output.

marginal rate of technical substitution The rate at which one input is substituted for another along an isoquant.

isocost curve-Line that shows all the possible combinations of inputs that can be purchased for a given total cost.

expansion path-A curve showing all of the cost-minimizing levels of input usage for various levels of output.

constant returns to scale - When the usage of all inputs is increased by an equal proportionate amount, output increases by exactly the same proportion.

increasing returns to scale- When the usage of all inputs is increased by an equal proportionate amount, output increases by a larger proportionate amount.

decreasing returns to scale-When the usage of all inputs is increased by an equal proportionate amount, output increases by a smaller proportionate amount.

long-run average cost -Cost per unit in the long run.

long-run marginal cost-The change in long-run total cost per unit change in output.

economies of scale-When long-run average cost falls as output increases.

diseconomies of scale-When long-run average cost increases with increases in output.

constant costs-Long-run average and marginal costs are equal for all levels of output.

economies of scope -The situation in which the joint cost of producing two goods is less than the sum of the separate costs of producing the two goods.

short-run expansion path-Horizontal line showing the cost-minimizing input combinations for various output levels when capital is fixed in the short run.