Theoretically,in a Long-Run Cost Function

question 11

Multiple Choice

Theoretically,in a long-run cost function:

• A) all inputs are fixed
• B) all inputs are considered variable
• C) some inputs are always fixed
• D) capital and labor are always combined in fixed proportions
• E) b and d

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Definitions:

Efficient Markets Hypothesis

The Efficient Markets Hypothesis suggests that asset prices in financial markets fully reflect all available information at any given time, making it impossible to consistently achieve higher returns than the overall market.

Interest Rate

The cost of borrowing money, expressed as a percentage of the amount borrowed, that lenders charge borrowers or the rate earned by depositors.

Interest Rate

The percentage charged on the total amount borrowed or earned on the total amount saved or invested.

Informationally Efficient

A characteristic of markets where all available information is already reflected in the prices of assets, ensuring that no participant can achieve consistent excess returns.