A Difference Between the Long Run and the Short Run

question 33

Multiple Choice

A difference between the long run and the short run is that:

• A)a firm is unable to vary some of its factors of production in the short run, while all the factors of production are variable in the long run.
• B)a firm is able to expand output by utilizing additional workers, raw materials, and physical capital in the short run, while it is impossible to hire additional workers or add raw materials to expand output in the long run.
• C)the short run is generally a period of one year, while the long run is a fixed period of 5 years for all firms across industries.
• D)the short run is of sufficient length to allow a firm to transform economic losses into economic profits, while the long run is too short to turn economic losses into economic profits.
• E)sunk costs are incurred in the short run, while they are not incurred in the long run.

Evaluate the tax implications of stock repurchases compared to cash dividends.

Identify the factors influencing a firm's decision on dividend payouts.

Understand the operational and legal aspects related to the declaration and payment of cash dividends.

Analyze the effects of stock prices adjustments through mechanisms like stock repurchases, splits, and special dividends.

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Definitions:

Blood Sugar

The concentration of glucose present in the blood, crucial for energy production in the body.

Placebo

is a substance or treatment with no therapeutic effect given to a participant in a study as a control to test the efficacy of another treatment, or used to elicit a psychological benefit through the belief in the treatment.

Metronome

A device used by musicians that marks time at a selected rate by giving a regular tick sound.

Meat Powder

A substance made from dried and pulverized meat, used as nutritional supplement or in cooking.