year 1se 3 Line 75 25 Figure 7.3.3 3) 3) Refer to Figure 7.33 above. The expansi
ID: 1109252 • Letter: Y
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year 1se 3 Line 75 25 Figure 7.3.3 3) 3) Refer to Figure 7.33 above. The expansion path in the figure leads to the construction of A) a long run average total cost curve. B)a short run marginal cost curve. C) a long run total cost curve. D) a long run marginal cost curve. 4) Suppose that the price of labor (PL) is $10 and the price of capital (PRO is $20. What is the equation of the isocost line corresponding to a total cost of $100? 4) A) PL 20PK E) 100 + 30 (Pt +Pd C) 100-30L K) D)100-10l+20K E) none of the above VC IC Figure 7.2.1 5) 5) Refer to Figure 7.2.1 above. The diagram above contains A) long-run B) intermediate run C) both short-run and long-run D) short-run cost curvesExplanation / Answer
4) wL+rK=TE=100
10L+20K=100
thus ans is D
5)D. The diagram shows short run cost curve because only in short run there are fixed factor or fixed cost.
3) ans is C because iaocost shows the total expenditure that is incurred to produce different Q
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