Why might firms experience diseconomies of scale?
What will be an ideal response?
The main reason for firms to experience diseconomies of scale is that there are limits to the efficient functioning of management. As a firm gets bigger, the layers of supervision grow, the costs of information and communication also grow more than proportionally so that the average cost increase.
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Refer to Table 2-11. What is China's opportunity cost of producing one pound of wheat?
A) 0.04 units of a digital camera B) 4 digital cameras C) 25 digital cameras D) 40 digital cameras
One should expect the forward exchange market to flourish
A) under a fixed exchange rate regime. B) under a flexible exchange rate regime. C) under neither fixed nor flexible exchange rate regimes. D) under both fixed and flexible exchange rate regimes. E) only under a gold standard.
In the traditional Keynesian model, an increase in government spending
A) causes the C + I + G + X line to shift upward by the full amount of the increase in government spending. B) causes the C + I + G + X line to shift upward by an amount less than the increase in government spending. C) causes the C + I + G + X line to shift upward by more than the increase in government spending. D) causes no change in the C + I + G + X line.
A recession is a period of time in which the total output of the economy falls
a. True b. False Indicate whether the statement is true or false