When economies of scale are large, firms can reduce their average total cost by:
A. eliminating the bureaucratic costs.
B. merging into even larger firms.
C. hiring professional managers.
D. selling off their subsidiaries.
Answer: B
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Why did the fall in housing prices lead to bank failures in the U.S. during 2007-2009?
What will be an ideal response?
An entrepreneur is considering how many limousines to purchase when he starts up a limousine service. Below are his estimates of the number of limousine rentals the service will make during a year, depending on the number of limousines available.Number oflimousinesTotal numberof rentals13502650390041,10051,250After paying all non-interest expenses, the owner expects to net $10 per rental. Each limousine costs $50,000. How many limousines should he purchase if the real interest rate is 4.5%?
A. 4. B. 2. C. 3. D. 1.
Which economic concept does the expression "time is money" reflect?
a. opportunity cost b. specialization c. market exchange d. comparative advantage e. efficiency
Market equilibrium occurs at that price for which
a. quantity supplied equals quantity demanded b. cost equals the wages to labor c. the surplus quantity drives increased demand d. quantity supplied exceeds quantity demanded e. quantity supplied is less than quantity demanded