Which of the Following Statements Is True

question 192

Multiple Choice

Which of the following statements is true?

• A) In the short run, a firm can vary all its inputs.
• B) In the long run, a firm cannot vary any of its inputs.
• C) The downward-sloping portion of the long-run average cost curve indicates the presence of economies of scale in production.
• D) The downward-sloping portion of the long-run average cost curve indicates the presence of diseconomies of scale in production.

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Definitions:

Mental Accounting

A concept in behavioral economics that refers to the different values people place on money, based on subjective criteria, affecting economic decision-making.

Confirmation Bias

The tendency to search for, interpret, favor, and recall information in a way that confirms one’s preexisting beliefs or hypotheses, often leading to statistical errors.

Affect Heuristic

A mental shortcut used in decision making and judgement that involves relying on emotions and feelings.

Regret Aversion

A theory in behavioral economics that describes the emotional reaction people experience after realizing they have made an error in judgment, leading them to avoid making decisions.