Production

1. What is the difference between the short run and the long run? 

The short run is where at least one factor of input is fixed in a period of time while in the long run all factor inputs are variable however the state of technology does not change unless in the very long run. 

1. Simply state the law of diminishing returns. 

When an increase in a factor combined with a fixed factor results in a decline in output. 

1. What are the 3 possibilities that could happen if all factor inputs increased by the same proportion? 

-increasing returns to scale 

-constant returns to scale 

-decreasing returns to scale 

1. When a firm doubles its land, labour and capital inputs, and…