Explain why in the case of economies of scope the production possibility frontier is bowed outward
What will be an ideal response?
With economies of scope a firm uses less resources if it produces 2 goods jointly instead of producing the 2 goods in two firms separately. This means that the firm can produce more of the 2 goods when the goods are produced jointly. Hence, the PPF is bowed outward.
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Long-term debt financing to midsize companies at the smaller end of the midsize range is provided by
A) commercial banks. B) individual investors. C) mutual funds. D) mezzanine debt funds.
The portion of the Obama stimulus package that provided unemployment benefits for longer than the usual 26 weeks is best thought of as
A. discretionary (and contractionary) fiscal policy. B. discretionary (and expansionary) fiscal policy. C. monetary policy. D. nondiscretionary fiscal policy.
A partnership can raise funds for expansion in which of the following ways?
A) issuing stock through secondary markets B) taking on more partners C) issuing stock through financial markets D) all of the above
What have we assumed when we conclude that a real depreciation of the currency improves the current account?
A) The volume effect outweighs the value effect. B) The value effect outweighs the volume effect. C) All else equal and the volume effect outweighs the value effect. D) All else equal and the value effect outweighs the volume effect. E) All else equal and the volume effect equals the value effect.