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Chapter 22: Q. 1 (page 507)

The academic calendar for a university is August 15 through May 15. A professor commits to a contract that binds her to a teaching position at this university for this period. Based on this information, explain the short run and long run that the professor faces.

Short Answer

Expert verified

The short-run may be a period during which factors of production remain constant.

The long-run may be a period during which factors of production will be changed easily.

Step by step solution

01

Introduction

The short run is defined as a period frame within which wage levels of other inputs are "sticky," or unyielding, while an long run is defined as the duration of time over however these production costs have opportunity to adapt. While product prices (i.e. prices of materials used to create more products) are even more controlled by huge contracts and begin to express, product pricing (i.e. product prices purchased by customers) are more adjustable.
02

Explanation

The short run that a professor faces is off 9 months considering that he/she cannot change the present job. The short-runmay be a period during which factors of production remain constant. especially fixed factors of production.

The long-run may be a period during which factors of production will be changed easily. Therefore, the amount which is larger than 9 months would be considered as a protracted endure the professor. After the contract period of 9 months, a professor can find employment elsewhere.

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Most popular questions from this chapter

If Tesla were to produce only a few dozen home batteries per month, would the company experience economies of scale or diseconomies of scale? Explain.

During autumn months, passenger railroads across the globe deal with a condition called slippery rail. It results from a combination of water, leaf oil, and pressure from the train's weight, which creates a slippery black ooze that prevents trains from gaining traction.

a. One solution for slippery rail is to cut back trees from all of a rail firm's rail network on a regular basis, thereby helping to prevent the problem from developing. If incurred, would this railroad expense be a better example of a fixed cost or a variable cost? Why?

b. Another way of addressing slippery rail is to wait until it begins to develop. Then the company purchases sand and dumps it on the slippery tracks so that trains already enroute within the rail network can proceed. If incurred, would this railroad expense be a better example of a fixed cost or a variable cost? Why?

In an effort to reduce their total costs, many companies are now replacing paychecks with payroll cards, which are stored-value cards onto which the companies can download employees' wages and salaries electronically. If the only factor of production that a company varies in the short run is the number of hours worked by people already on its payroll, would shifting from paychecks to payroll cards reduce the firm's total fixed costs or its total variable costs? Explain your answer.

What would likely happen to long-run average cost at Oman's facility if engineers encountered difficulties in maintaining the facility's substantial daily volume of oil production? Explain.

Describe production at a firm and explain why the marginal product of labor eventually declines as more units of labor are employed.
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