The flow of private foreign investment and grants and loans is included in a country's
(a) current account.
(b) capital account.
(c) cash account.
(d) none of the above.
B
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Financial intermediaries reduce transactions costs by
A) charging fees to small savers. B) charging fees to small investors. C) taking advantage of economies of scale. D) avoiding risky investments.
Generally, economies of scope are present when
A) economies of scale are present in the production of two or more goods. B) economies of scale are constant in the joint production of two products. C) joint output is less from a single firm than could be achieved from two different firms each producing a single product (assuming equivalent production inputs in both situations). D) joint output is greater from a single firm producing two goods than could be achieved by two different firms each producing a single product (assuming equivalent production inputs in both situations).
Darlene runs a fruit and vegetable stand in a medium-sized community where there are many such stands. Her weekly total revenue equals $2,000 . Her weekly total cost of running the stand equals $3,500, consisting of $2,500 of variable costs and $1,000 of fixed costs. An economist would likely advise Darlene to: a. shut down as quickly as possible in order to minimize her losses
b. keep the stand open because it is generating an economic profit. c. keep the stand open for a while longer because she is covering all of her variable costs and some of her fixed costs. d. keep the stand open for a while longer because she is covering all of her fixed costs and some of her variable costs.
Since advertising increases a firm's average total cost, consumers ultimately pay for the cost of advertising in the form of a higher price in the long run. It is not possible for a firm to end up with a lower profit-maximizing price as the result of advertising
a. True b. False