The Ownership and Control of Foreign Assets Such as a Manufacturing

question 6

Multiple Choice

The ownership and control of foreign assets such as a manufacturing plant is called:

• A)a hedge.
• B)foreign direct investment.
• C)exposure.
• D)derivatives.

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Definitions:

Cost-output Elasticity

A measure of the responsiveness of the cost of production to a change in the level of output, indicating how costs change as production scales.

Economies of Scale

Refers to the cost advantage that arises with increased output of a product, where fixed costs are spread out over more units of output.

Economies of Scope

Cost advantages that enterprises obtain due to a broader scope of operations, often through producing a variety of products rather than specializing in just one.

Marginal Products

The extra output obtained by utilizing an additional unit of a specific input while keeping all other inputs unchanged.