If the Exchange Rate for the U

question 342

True/False

If the exchange rate for the U.S. dollar changes from $1.25 per euro to $1.50 per euro, then the dollar depreciates.

---

Definitions:

Decreasing Returns to Scale

Decreasing returns to scale occur when an increase in all inputs leads to a less than proportional increase in output, showing that the firm becomes less efficient as it scales up production.

Increasing Opportunity Costs

A situation where the cost of forgoing the next best alternative increases as more resources are devoted to an activity.

Scale Reduction

The process of decreasing the size or output level of operations in a business or economic system.

Total Cost

The complete cost of production, including both fixed and variable costs, for a specific level of output.