If Smart Touch Learning Increases Its Production of Tablet Computers,what

question 242

Multiple Choice

If Smart Touch Learning increases its production of tablet computers,what will be the effects on the variable and fixed costs per tablet?

• A) variable costs per tablet decrease, fixed costs per tablet increase
• B) variable costs per tablet increase, fixed costs per tablet is constant
• C) variable costs per tablet increase, fixed costs per tablet decrease
• D) variable costs per tablet is constant, fixed costs per tablet decrease

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Definitions:

Relative Purchasing Power Parity

Relative Purchasing Power Parity (RPPP) is an economic theory which postulates that the rate at which the exchange rate between two currencies will change over time is equivalent to the rate at which their purchasing power converges, essentially due to inflation rates differences.

Inflation

The rate at which the general level of prices for goods and services is rising, eroding purchasing power over time.

Long-Run Exchange Rate Risk

The potential for financial loss over time due to fluctuations in foreign exchange rates affecting international investments and transactions.

International Firm

A company that conducts its operations and business activities in more than one country.