Related to the Economics in Practice on Page 196

question 287

Multiple Choice

Related to the Economics in Practice on page 196. The search engine business, which includes companies like Google and Bing, is subject to economies of scale. This means that as the use of a search engine such as Google ________, the long-run cost to provide additional searches on this engine will likely ________.

• A) increases; rise
• B) increases; fall
• C) decreases; fall
• D) increases or decreases; stay the same

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Definitions:

Accounts Payable

Money owed by a company to its suppliers or creditors for goods and services received but not yet paid for.

Cash Flow To Stockholders

The net amount of cash and cash-equivalents being transferred into and out of a company, specifically relating to the dividends paid to stockholders and the cash received from issuing new shares.

Dividends Per Share

The total amount of declared dividends for every share of common stock issued, divided by the number of outstanding shares.

Common Stock Offering

The process by which a corporation issues new shares of common stock to the public.