If Factor Prices Decrease

question 5

Multiple Choice

If factor prices decrease,

• A) there will be a downward shift in the long- run average cost curve but not in the short- run average cost curve.
• B) a firm will move down along both its long- run and short- run average cost curves.
• C) both the long- run and short- run average cost curves will shift downward.
• D) a firm will move down along its long- run average cost curve only.
• E) there will be no change in the cost curves in the long run.

---

Definitions:

Resources Are Scarce

The principle that the availability of natural, human, and capital resources is limited, necessitating choices about their allocation and use.

Normative Statements

Statements that express opinions on how the world ought to be, involving value judgments rather than factual claims.

Expressions Of Facts

Statements that aim to convey information about reality or actual events without alteration.

Economic Model

A simplified representation or framework that economists use to describe and analyze economic processes, relationships, or phenomena.