Direct finance refers to the flow of funds from savers to borrowers through financial markets

Jessica owns a company that makes pre-packaged sandwiches for convenience stores. The market price for a sandwich is $5 and Jessica is a price-taker. Her daily variable cost for making sandwiches is C(Q) = 2.5Q + (Q2/40) and her marginal cost is MC = 2.5 + (Q/20). What is the average cost of a sandwich at the quantity of sandwiches Jessica should be selling each day?

A. $1.25 B. $2.50 C. $3.75 D. $6.25

An externality is present in a free market whenever:

A. an activity generates costs or benefits that are not reflected in market prices. B. a monopolist spends funds to keep potential competitors out of the market. C. a tax is imposed on the supplier of a good. D. firms hire employees from outside the firm to fill positions normally filled by promotion from within the firm.