Part 1In economics, the very long run for a firm is A. a period of time that starts on January 1 and ends on December 31 of possibly another year. B. the time frame in which the firm can change the amounts of all inputs of production and its technology. C. the time frame in which the firm can change the amounts of some, but not all, inputs of production. D. the time frame in which the firm can change the amounts of all inputs of production, but not its technology. E. usually nine months, but it depends on the accounting laws of each country.

Question

Part 1In​ economics, the very long run for a firm is A. a period of time that starts on January 1 and ends on December 31 of possibly another year. B. the time frame in which the firm can change the amounts of all inputs of production and its technology. C. the time frame in which the firm can change the amounts of some, but not all, inputs of production. D. the time frame in which the firm can change the amounts of all inputs of production, but not its technology. E. usually nine ​months, but it depends on the accounting laws of each country.

BlackTom AI · Accepted Answer

Here is the question and the available options restated for clarity.
Question: Part 1 In economics, the very long run for a firm is
Options:
A. a period of time that starts on January 1 and ends on December 31 of possibly another year.
B. the time frame in which the firm can change the amounts of all inputs of production and its technology.
C. the time frame in which the firm can change the amounts of some, but not all, inputs of production.
D. the time frame in which the firm can change the amounts of all inputs of production, but not its technology.
E. usually nine months, but it depends on the accounting laws of each country.
Now, let’s evaluate each option in turn, noting what each one implies about the very long run in production theory.
A. "a period of time that starts on January 1 and ends on December 31 of possibly another year".
This option describes a calendar year or fiscal year, not an economic concept related to production inputs or technology. It uses a fixed annual boundary without tying it to what can be altered in production. Therefore, it does not capture the defining feature of the very long run in economics, which is about the scope of adjustable inputs and technologies rather than calendar timing.
B. "the time frame in which the firm can change the amounts of all inputs of production and its technology."
This option aligns with the standard economic definition of the very long run: all inputs are variable and technology can be changed, so there are no fixed factors. Firms can alter plant size, capacity, and processes—essentially all factors of production and the methods used. This is the core characteristic that differentiates the very long run from shorter horizons where some inputs are fixed.
C. "the time frame in which the firm can change the amounts of some, but not all, inputs of production."
This describes a long run where some inputs might be variable while others remain fixed, which is inconsistent with the very long run concept where even the most fundamental inputs (including capacity and technology) can be adjusted. Hence, this option incorrectly narrows the scope relative to the standard definition.
D. "the time frame in which the firm can change the amounts of all inputs of production, but not its technology."
This statement asserts that technology cannot be changed while all inputs can be changed. In the very long run, technology is considered a selectable input alongside other inputs; therefore, excluding technology makes this option incorrect with respect to the very long run. It conflates changes in physical inputs with methodological or technological changes that are typically included in the long horizon.
E. "usually nine months, but it depends on the accounting laws of each country."
This option again ties the concept to an arbitrary administrative period rather than economic theory. The nine-month duration is a legal or accounting convention, not a determining feature of the very long run in production theory. It mischaracterizes what economists mean by long run, which is about flexibility in all inputs and technology, not a fixed reporting period.
In summary, the reasoning hinges on understanding what the very long run enables a firm to alter. A focuses on calendar time, which is irrelevant to the economic concept. C and D place limits on which inputs or technologies can be changed, contradicting the very long run idea that all inputs and technology can be adjusted. E relies on accounting conventions rather than production theory. B correctly identifies the very long run as the period during which all inputs and technology are variable, capturing the essential scope of change available to a firm over that horizon.

Quiz:TEXTBOOK QUIZ CH 07

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