Item2Item 2To economists the main difference between "the short run" and "the long run" is that:Multiple Choicethe law of diminishing returns applies in the long run, but not in the short run.in the long run all factors of production are variable, while in the short run at least one factor of production is fixed.fixed costs are more important to decision making in the long run than they are in the short run.in the short run all factors of production are fixed, while in the long run all factors of production are variable.

At every output level, a firm’s short-run average cost (SAC) equals or exceeds its long-run average cost (LAC) because:a. Diminishing returns apply in the short run.b. Returns to scale only exist in the long run.c. Opportunity costs are taken into account in the short run.d. There are at least as many possibilities for substitution between factors of productionin the long run as in the short run.e. Economies of scope only apply in the long run.

What is the difference between a firm's short-run and long-run costs?a. Short-run costs are always lower than long-run costs.b. In the short run, some costs are fixed, while in the long run, all costs are variable. c. In the short run, all costs are variable, while in the long run, some costs are fixed.d. Short-run costs are always higher than long-run costs.

Which of the following statements is TRUE regarding short-run and long-run production functions?Question 7Answera.The long run is a period during which all inputs are variable.b.The long run is a period during which at least one input is fixed.c.The short run allows for greater flexibility in adjusting production levels.d.The long run assumes that technology is constant.

Supply is more elastic over long periods than over short periods because: multiple choiceproducers can make fewer adjustments in the long run than in the short run.consumers can make fewer adjustments in the long run than in the short run.producers can make more adjustments in the long run than in the short run.consumers can make more adjustments in the long run than in the short run.

Which statement is true?   Long-run average costs are the same or more than short-run average costs.   Long-run average costs equal long-run marginal costs for every level of output.   None of these answers is correct. You Answered  Long-run average costs are increasing due to diminishing marginal product. Correct Answer  Long-run average costs are the lower envelope of short-run average cost curves.