Economies of Scale

question 238

Multiple Choice

Economies of scale

• A)require inputs' MPP to fall as output increases (everything else equal).
• B)pertain to the long run only.
• C)refer to increased output generalized by an increase in the quantity of a single input.
• D)imply that the AC curve will fall continuously as output increases in the short run.

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Definitions:

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation, a creditor relationship with a governmental body or a corporation, or rights to ownership as represented by an option.

Nonsystematic Risk

Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also called unique risk, firm-specific risk, or diversifiable risk. Systematic risk refers to risk factors common to the entire economy.

Diversifiable Risk

Nonmarket or firm-specific risk factors that can be eliminated by diversification. Also called unique risk, firm-specific risk, or nonsystematic risk. Nondiversifiable risk refers to systematic or market risk.

Market Risk

Also known as systemic risk, it's the potential for investors to experience losses due to factors that affect the overall performance of the financial markets.