Short-Run Average Cost Exceeds Long-Run Average Cost Only When There

question 103

True/False

Short-run average cost exceeds long-run average cost only when there are economies of scale.

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Definitions:

Production Efficiency

A situation where the economy is utilizing all of its resources efficiently, producing what people want at the lowest possible cost.

Production Possibility Frontier

Describes the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized.

Unemployment Rate

The percentage of the labor force that is jobless and actively looking for employment.

Ppf

Production Possibility Frontier, a curve depicting all maximum output possibilities for two or more goods given a set of inputs.