Answer:
Alexander would enhance his stereo playing for 100 dollars more. Mary would pay a lawyer 100$
Explanation:
Socially optimal solution is the situation where all external costs are taken into account, as well as internal costs and benefits. Therefore, If Alexander's benefits from playing the stereo is 250 dollars and Mary's costs are 350 dollars, than in order to get socially optimal solutions, Alexander could enhance his stereo playing for 100 dollars more. Mary would pay a lawyer up to 100 dollars.
According to the <em>"Not Too Big Enough" </em>article, some of the <em>sources of </em><em>scale economies</em><em> in the banking and finance industry</em> are as follows:
1. Bigger banks can spread their investment (fixed) costs over more output, thereby <em>reducing the </em><em>cost per unit </em><em>and making it impossible for </em><em>smaller banks </em><em>to compete in the market</em>. Most often, the smaller banks cannot afford investments in modern banking computing power and systems management.
2. Bigger banks can <em>consolidate banking functions</em> with the <em>elimination of redundancies </em>after each merger and acquisition. The cost of redundancies also gives them economies of scale.
3. Bigger banks have access to <em>larger pools of </em>deposits and will not engage in borrowing at higher costs. Smaller banks cannot tow this line because of their small scale, lacking the required funding mix.
4. Finally, advertising works best where a bank has a large geographic spread. The cost of advertising over a large area is worth it, unlike when a small bank markets its services by advertising.
2. These economies of scale mean that Oligopolies are increasing on Wall Street, and there will be further consolidations of smaller banks. Of course, every small bank would like to engage in mergers and acquisitions to grab a share of the scale economies.
Thus, <em>as banks grow large</em>, they should be mindful that enjoying the scale economies comes with the risk of crumbling like the banks regarded as <em>"too big to fail" </em>when they build on a pack of cards.
Learn more: brainly.com/question/3156270
Answer:
A) Demand would increase
Explanation:
Interest rates and demand are inversely related, that is to say, if interest rates rise, demand decreases, and if interest rates go down, demand goes up.
The reason for this is that a lower interest rate means that loans are cheaper. As loans are cheaper, investments increase, and more investment means more aggregate demand because investment is one of its components.
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