A firm's production process shows constant returns to scale. It can produce 5,000 widgets at a total cost of $2,500 and 10,000 widgets at an average cost of

An increase in interest rates will cause investment to

A) increase. B) decrease. C) not change. D) move erratically, depending on the interest rate effect on saving.

If a firm experiences decreases in the per-unit costs of production as its network increases, then this firm is experiencing

A) economies of scope. B) economies of scale. C) network externalities. D) differentiation.