AGEC CH 7 EXAM QUESTIONS AND ANSWERS FULLY SOLVED LATEST UPDATE

AGEC CH 7 EXAM QUESTIONS AND ANSWERS FULLY SOLVED LATEST UPDATE If a firm's output more than doubles when all inputs are doubled, production is said to occur under conditions of - Answers increasing returns to scale. One advantage of the specialization that results from international trade is that countries can take advantage of - Answers scale economies. If a firm's output doubles when all inputs are doubled, production is said to occur under conditions of - Answers constant returns to scale If a firm's output less than doubles when all inputs are doubled, production is said to occur under conditions of - Answers decreasing returns to scale. The existence of external economies of scale - Answers may be associated with a perfectly competitive industry. The existence of internal economies of scale - Answers cannot be associated with a perfectly competitive industry. When there are external economies of scale, an increase in the size of the market will - Answers increase the number of firms and lower the price per unit. If some industries exhibit internal increasing returns to scale in each country, we should not expect to see - Answers perfect competition in these industries. External economies of scale arise when the cost per unit - Answers falls as the industry grows larger and rises as the average firm grows larger. Internal economies of scale arise when the cost per unit - Answers falls as the average firm grows larger. Where there are internal economies of scale, the scale of production possible in a country is constrained by - Answers the size of the domestic plus the foreign market. Internal economies of scale will ________ average cost when output is ________ by ________. - Answers reduce; increased; a firm External economies of scale will ________ average cost when output is ________ by ________. - Answers reduce; increased; the industry External economies of scale often arise because similar firms - Answers locate in the same geographic region. The Internet has made transactions between businesses (B2B trading) fast and easy. Any business in any location can access specialized knowledge, labor, and materials. It is likely that these virtual economic communities will result in - Answers external economies of scale. The long-run market supply curve in the presence of internal economies of scale is ________, and in the presence of external economies of scale, it is ________. - Answers downward sloping; downward sloping If output is increased in the long-run, average production costs in the presence of internal economies of scale will ________, and in the presence of external economies of scale, will ________. - Answers decrease; decrease If the firms in a market have constant returns to scale internally while there are external economies of scale for the industry, a firm's long-run supply curve will be ________ and the lo