Which of the following is CORRECT?

Question

BlackTom AI · Accepted Answer

First, let's outline the core concept: in the short run, some inputs are fixed while others are variable, whereas in the long run all inputs are variable.
Option a: 'There are variable resources and fixed resources in the short run.' This matches the standard view of short-run production where certain resources (like capital equipment) are fixed, and others (like labor or materials) can vary. Therefore this statement is correct.
Option b: 'Machinery is an example of a variable cost in the short run.' In the short run, machinery typically represents a fixed cost (capital that cannot be easily changed in the short term), while variable costs pertain to inputs that can be adjusted, such as wages or materials. So this option is incorrect.
Option c: 'Some resources are fixed in the long run.' The long run is defined as a period where all inputs are adjustable; there are no fixed resources assumed in the long run. Hence this statement is false.
Option d: 'There are no fixed resources in the short run.' This contradicts the fundamental distinction of the short run having fixed resources, so it is false.
Thus, after evaluating all options, option a is the correct description of the short-run resource structure.

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