Which of the following would be considered long-run choices

| November 24, 2016

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Which of the following would be considered long-run choices? Which are short-run choices?
A dentist hires a new part-time dental hygienist.
The local oil refinery plans a complete restructuring of its production processes, including relocating the plant.
A farmer increases the quantity of water applied to his or her fields.
A law partnership signs a 3-year lease for an office complex.
The university hires a new football coach on a 3-year contract.
“There are no fixed costs in the long run.” Explain.
Business is booming at the local McDonald’s restaurant. It is contemplating adding a new grill and french-fry machine, but the day supervisor suggests simply hiring more workers. How should the manager decide which alternative to pursue?
Suppose that the average age of students in your economics class is 23.7 years. If a new 19-year-old student enrolls in the class, will the average age in the class rise or fall? Explain how this relates to the relationship between average and marginal values.

The table below shows how the number of university classrooms cleaned in an evening varies with the number of janitors:
Janitors per evening 0 1 2 3 4 5 6 7
Classrooms cleaned per evening 0 3 7 12 16 17 17 16
What is the marginal product of the second janitor?
What is the average product of four janitors?
Is the addition of the third janitor associated with increasing, diminishing, or negative marginal returns? Explain.
Is the addition of the fourth janitor associated with increasing, diminishing, or negative marginal returns? Explain.
Is the addition of the seventh janitor associated with increasing, diminishing, or negative marginal returns? Explain.
Draw the total product, average product, and marginal product curves and shade the regions corresponding to increasing marginal returns, decreasing marginal returns, and negative marginal returns.
Calculate the slope of the total product curve as each janitor is added.
Characterize the nature of marginal returns in the region where
The slope of the total product curve is positive and increasing.
The slope of the total product curve is positive and decreasing.
The slope of the total product curve is negative.
Suppose a firm is producing 1,000 units of output. Its average fixed costs are $100. Its average variable costs are $50. What is the total cost of producing 1,000 units of output?
The director of a nonprofit foundation that sponsors 8-week summer institutes for graduate students analyzed the costs and expected revenues for the next summer institute and recommended that the session be canceled. In her analysis she included a share of the foundation’s overhead—the salaries of the director and staff and costs of maintaining the office—to the program. She estimated costs and revenues as follows:
Projected revenues (from tuition and fees) $300,000
Projected costs
Overhead $ 50,000
Room and board for students $100,000
Costs for faculty and miscellaneous $175,000
Total costs $325,000
What was the error in the director’s recommendation?

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