As a firm expands into overseas markets, information problems and the complexity of operating within many varied cultures and economies may result in
a. constant returns to scale
b. diminishing marginal returns
c. declining long-run marginal cost
d. diseconomies of scale
e. economies of scale
D
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Steven lives in a big city where there is a shortage of parking. He has a parking spot in his driveway where he parks his car. Which of the following statements is most correct?
A) The opportunity cost of using the spot is zero, because Steven owns the house. B) Steven has a lower opportunity cost of owning a car than his neighbor, who must rent a parking spot. C) The opportunity cost of using the parking spot is the price he could charge someone else for using the spot. D) The opportunity cost depends on how much Steven's mortgage payment is.
Let C = 800 + 0.6y and I = 100. Assume no government or foreign sectors. If investment decreases by 40, the equilibrium output decreases by a total of
A) 800. B) 480. C) 100. D) 25.