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Multiple Choice
Which of the following add nothing to the firm's output?
A
Variable inputs in the long run
B
Labor employed in production
C
Fixed inputs in the short run
D
Raw materials used in manufacturing
Verified step by step guidance
1
Step 1: Understand the difference between fixed inputs and variable inputs. Fixed inputs are resources that cannot be changed in the short run, while variable inputs can be adjusted to change output.
Step 2: Recognize that in the short run, fixed inputs do not change regardless of the level of output, so they do not add additional output when increased because they are fixed.
Step 3: In contrast, variable inputs like labor and raw materials can be increased or decreased, and they directly contribute to changes in the firm's output.
Step 4: In the long run, all inputs are variable, so variable inputs in the long run do add to the firm's output because the firm can adjust all factors of production.
Step 5: Therefore, the inputs that add nothing to the firm's output are the fixed inputs in the short run, since they cannot be changed to increase production during that period.