ECON 528 - ULL - Final Exam UPDATED
QUESTIONS AND CORRECT ANSWERS
Which of the following is a reason why a firm would experience diseconomies of scale?
Select one:
a. As the size of the firm increases, it becomes more difficult to find markets where it doesn't already
have operations.
b. To finance an increase in the size of its plant a firm must borrow more money or sell more shares of
stock.
c. As the size of the firm increases, it must operate in other countries where differences in language,
customs and laws increase its average costs.
d. As the size of the firm increases it becomes more difficult to coordinate the operations of its
manufacturing plants. - CORRECT ANSWER d. As the size of the firm increases it becomes
more difficult to coordinate the operations of its manufacturing plants.
The minimum efficient scale is
Select one:
a. the plant size that yields the most profit.
b. level of operation where long-run average costs are lowest.
c. the level of output where diminishing returns have not set in yet.
d. the smallest output level where the firm finally reaches productive efficiency. - CORRECT
ANSWER b. level of operation where long-run average costs are lowest.
scale?
Select one:
a. Larger firms may be able to purchase inputs at lower costs than smaller competitors.
b. Technology can make it possible to increase production with a smaller increase in at least one input.
c. Workers and managers can become more specialized, enabling them to be more productive.
d. As output increases, the managers can begin to have difficulty coordinating the operations of their
firms. - CORRECT ANSWER d. As output increases, the managers can begin to have difficulty
coordinating the operations of their firms.
Economies of scope exist between book publishing and magazine publishing if
QUESTIONS AND CORRECT ANSWERS
Which of the following is a reason why a firm would experience diseconomies of scale?
Select one:
a. As the size of the firm increases, it becomes more difficult to find markets where it doesn't already
have operations.
b. To finance an increase in the size of its plant a firm must borrow more money or sell more shares of
stock.
c. As the size of the firm increases, it must operate in other countries where differences in language,
customs and laws increase its average costs.
d. As the size of the firm increases it becomes more difficult to coordinate the operations of its
manufacturing plants. - CORRECT ANSWER d. As the size of the firm increases it becomes
more difficult to coordinate the operations of its manufacturing plants.
The minimum efficient scale is
Select one:
a. the plant size that yields the most profit.
b. level of operation where long-run average costs are lowest.
c. the level of output where diminishing returns have not set in yet.
d. the smallest output level where the firm finally reaches productive efficiency. - CORRECT
ANSWER b. level of operation where long-run average costs are lowest.
scale?
Select one:
a. Larger firms may be able to purchase inputs at lower costs than smaller competitors.
b. Technology can make it possible to increase production with a smaller increase in at least one input.
c. Workers and managers can become more specialized, enabling them to be more productive.
d. As output increases, the managers can begin to have difficulty coordinating the operations of their
firms. - CORRECT ANSWER d. As output increases, the managers can begin to have difficulty
coordinating the operations of their firms.
Economies of scope exist between book publishing and magazine publishing if
