Evidence from Empirical Studies of Long-Run Cost-Output Relationships Lends Support

question 5

Multiple Choice

Evidence from empirical studies of long-run cost-output relationships lends support to the:

• A) existence of a non-linear cubic total cost function
• B) hypothesis that marginal costs first decrease,then gradually increase over the normal operating range of the firm
• C) hypothesis that total costs increase quadratically over the ranges of output examined
• D) hypothesis that total costs increase linearly over some considerable range of output examined
• E) none of the above

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Definitions:

Cognitive Abilities

The mental capacities that involve the ability to reason, plan, solve problems, think abstractly, and comprehend complex ideas.

Vigilance

The act or state of keeping careful watch for possible danger or difficulties.

Electrically Charged

Having an excess or deficiency of electrons, resulting in the ability to exert an electromagnetic force on other charged objects.

Neurons

The basic working units of the brain and the nervous system, cells responsible for receiving sensory input from the external world, sending motor commands to our muscles, and transforming and relaying the electrical signals at every step in between.