If, When a Firm Doubles All Its Inputs, Its Average

question 42

Multiple Choice

If, when a firm doubles all its inputs, its average cost of production increases, then production displays

• A)diminishing returns.
• B)economies of scale.
• C)diseconomies of scale.
• D)declining fixed costs.

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Definitions:

Quoted

Refers to the current price of a security, commodity, or index as provided by a market or exchange.

Callable Bond

A type of bond that the issuer has the right to repay before its maturity date, at a predetermined call price.

Sinking Fund

A reserve fund established by a company to repay debt or replace a major asset in the future.

Income Bond

A type of bond that only pays interest if the issuing corporation has earned enough income to cover the interest payments, often used by companies in financial distress.