This theory follows that maximum gain on a worldwide basis will be realized if there are no impediments to trade, if there is free competition in pricing, and if capital flows are unrestricted.

Which of the following statements about the federal flood insurance program is true?

A) Under the write-your-own program, each insurer services the policies it writes. B) The regular portion of the program does not allow the purchase of higher amounts of coverage than are available under the emergency portion of the program. C) No coverage is available for property owners in areas where flooding has occurred previously. D) The maximum amount of coverage that can be written on any single dwelling is $25,000.

Economies of scope refer to cost savings that arise when the

A) size of financial transactions increase. B) size of financial transactions decrease. C) number of different activities undertaken increases. D) number of different activities undertaken decreases.