If Your Plant Is Operating in the Positively-Sloped Portion of a Long-Run

question 149

Multiple Choice

If your plant is operating in the positively-sloped portion of a long-run average cost curve, this could be the result of:

• A) lower wages.
• B) economies of scale.
• C) diseconomies of scale.
• D) improved utilization of by-products.

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Definitions:

Net Capital Outflow

The difference between the purchase of foreign assets by domestic residents and the purchase of domestic assets by foreigners over a specific time period, indicating the flow of capital out of a country.

Mexican Assets

Financial investments or physical properties located in Mexico, including stocks, bonds, real estate, and other forms of assets.

Pesos

The official currency of Mexico and several other Latin American countries.

Purchasing Power Parity

An economic theory that compares different countries' currencies through a "basket of goods" approach to estimate the exchange rate at which two currencies will be at parity, or have the same purchasing power.