Refer to Figure 7.2. A movement from A to B in the figure represents
A) economies of scale.
B) diseconomies of scale.
C) learning.
D) economies of scope.
E) diseconomies of scope.
A
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If the current account balance is $235 billion and U.S. official reserves increased by $35 billion, what is the official settlements account balance and the capital and financial account balance?
What will be an ideal response?
What impact might a decrease in the U.S. federal budget deficit have on interest rates and exchange rates in the market for the U.S. dollar? (Assume the exchange rate is stated in terms of foreign currency per U.S. dollar.)
A) Interest rates and exchange rates decrease. B) Interest rates and exchange rates increase. C) Interest rates increase and exchange rates decrease. D) Interest rates decrease and exchange rates increase.
If a perfectly competitive firm incurs an economic loss, it should
A) shut down immediately. B) try to raise its price. C) shut down in the long run. D) shut down if this loss exceeds fixed cost.
When nations specialize in their areas of comparative advantage and then trade with the rest of the world, the result is that
A) the average standard of living in the world will go down. B) the average standard of living in the world will go up. C) the world will move from a point on the production possibilities curve to a point inside the curve. D) worldwide economic efficiency will decrease.