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True or False Quiz
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1
The long run is the circumstance in which at least one input is variable.
A)True
B)False
2
While a firm can plan for the long run, it must always operate in the short run.
A)True
B)False
3
Constant returns to scale means a firm’s output increases by the same percentage as the increase in its inputs.
A)True
B)False
4
Economies of scale means average costs increase as a firm grows in size.
A)True
B)False
5
The long-run average cost curve declines continuously as output levels increase.
A)True
B)False
6
Labour, management, and machine specialization are examples of pecuniary economies of scale.
A)True
B)False
7
Economies of scale are divided into those cost advantages that are technical and those that are pecuniary.
A)True
B)False
8
A firm’s economic capacity and its most productive output level are the same.
A)True
B)False
9
Bureaucracy is the main cause of diseconomies of scale.
A)True
B)False
10
The right size of firm is determined by the minimum point on its short-run average cost curve.
A)True
B)False





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