Question

21

1. Because all costs are variable, the long run production function:
2. Shows the most efficient way of producing any level of output.
3. Only exists in fairytales.
4. Cannot help us in any way.
5. Represents costs as fixed.
6. All of the above.

22

1. The long run depends on the specifics of the firm in question:
2. But it can never be longer than one year.
3. But it must always be shorter than one year.
4. But it can never be longer than five years.
5. But it can never be shorter than five years.
6. It is not a precise period of time.

23

1. Physical capital and labor:
2. Cannot simultaneously exist.
3. Are mutually exclusive inputs.
4. Can only serve as complements to each other.
5. Can often serve as substitutes for each other.
6. Are better than bacon.

Answer 1

1. Shows the most efficient way of producing any level of output.
2. It is not a precise period of time.
3. Can only serve as complements to each other.