1. Which one of the following statements is false?
a. In the long run all production inputs are variable.
b. Decreasing returns to scale prevail when output increases by a proportion that is smaller than the proportion by which all inputs increase.
c. When marginal cost equals average variable cost, average variable cost is at its minimum.
d. Average fixed cost curve can have a U-shape.
2. Increasing returns to scale in production means
a. more than twice as much of all inputs is required to double output.
b. less than twice as much of all inputs is required to double output.
c. more than twice as much of only one input is required to double output.
d. isoquants must be linear. e. none of the above.
3. The demand curve facing a price-making firm is
a. downward sloping to the right.
b. horizontal at all output rates for the firm.
c. upward sloping and then downward sloping as output is increased.
d. downward sloping and then upward sloping as output is increased