The Following Information Is Available on the Average Costs of the Three

question 41

Multiple Choice

The following information is available on the average costs of the three major banks in a given local market.Bank A has assets of $10 million and average costs are 15 percent,Bank B has assets of $20 million and average costs of 13 percent while Bank C has assets of $30 million with average costs of 12 percent.Average costs are measured as a proportion of total assets.

The above values indicate that

• A)there are significant economies of scale still present in the local markets.
• B)there are significant diseconomies of scale still present in the local markets.
• C)there are significant economies of scope still present in the local markets.
• D)there are significant diseconomies of scope still present in the local markets.

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Definitions:

Federal Income Taxes

Taxes levied by the government on the income earned by individuals, corporations, trusts, and other legal entities.

Merit Rating

A system used to evaluate the performance of employees by systematically rating them on their abilities and achievements within the organization.

State Unemployment Taxes

Taxes paid by employers to fund the state unemployment compensation programs for laid-off workers.

Merit Rating

A system used to evaluate and grade an employee’s performance, often influencing salary increments and promotions.