The Short Run Is Not the Same Length of Time

question 148

Multiple Choice

The short run is not the same length of time for all firms and industries because:

• A) entrepreneurs have different tastes and preferences.
• B) the average product of labor varies across industries.
• C) the life span of capital and the extent of capital specialization will vary across firms and industries.
• D) The marginal product of capital begins to diminish at different levels of capital utilization across firms.

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Definitions:

Productivity

The measure of efficiency of production, typically expressed as the ratio of outputs to inputs in the production process.

Domestic Residents

Individuals who live within a country and participate in its economy by working, spending, and investing there.

Role Of Government

The responsibilities and duties of government entities, including creating laws, providing social services, and ensuring economic stability.

Productivity

The measure of how efficiently inputs are converted into outputs; an increase in productivity means more output is produced with the same amount of inputs.