The Model: Y_t = ₀ + ₁c_t

question 1

Multiple Choice

The model: Y_t = ₀ + ₁c_t + u_t, t = 1,2,……., n is an example of a(n) :

• A)autoregressive conditional heteroskedasticity model.
• B)static model.
• C)finite distributed lag model.
• D)infinite distributed lag model.

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Definitions:

Average Variable Cost

The total variable cost divided by the quantity of output produced, representing the variable cost per unit of output.

Average Fixed Cost

The fixed costs of production divided by the quantity of output produced, which decreases as production increases.

Long Run

The long run is a period in which all inputs and production technologies can be varied, with no fixed factors of production.

Long-Run

Pertains to a period in which all factors of production and costs are variable, allowing companies to adjust all inputs.