Question 1

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 .

Accepted Answer

In the presence of internal economies of scale, firms experience lower costs as they increase production, leading to a downward sloping supply curve. With external economies of scale, the industry's average costs decrease as the industry grows, also resulting in a downward sloping supply curve.

Question 2

The existence of internal economies of scale

Accepted Answer

E

Question 3

Internal economies of scale arise when the cost per unit

Accepted Answer

Internal economies of scale occur when a firm's average costs decrease as it increases its own production, leading to a larger firm size.

Question 4

External economies of scale will average cost when output is by .

Accepted Answer

External economies of scale occur when the average cost of production decreases as the industry output increases, benefiting all firms within the industry.

Question 5

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 long- run market supply curve will be .

Accepted Answer

A firm's long-run supply curve will be horizontal due to constant returns to scale internally, while the market supply curve will be downward sloping due to external economies of scale.

Question 6

If a firm's output less than doubles when all inputs are doubled,production is said to occur under conditions of

Accepted Answer

When a firm's output less than doubles as all inputs are doubled, it is experiencing decreasing returns to scale, meaning that the proportional increase in inputs results in a less than proportional increase in output.

Question 7

One advantage of the specialization that results from international trade is that countries can take advantage of

Accepted Answer

Specialization allows countries to produce goods more efficiently and at a larger scale, leading to economies of scale, which reduces costs and increases output.

Question 8

Internal economies of scale will average cost when output is by .

Accepted Answer

Internal economies of scale occur when a firm's average costs decrease as its output increases, due to factors like improved efficiency or bulk purchasing.

Question 9

If output is increased in the long run,average production costs in the presence of internal diseconomies of scale will ,and in the presence of external diseconomies of scale,will .

Accepted Answer

The answer of If output is increased in the long...

Question 10

External economies of scale often arise because similar firms

Accepted Answer

External economies of scale occur when firms benefit from factors outside their control, such as being located in a region with a concentration of similar firms, which can lead to shared resources, skilled labor, and knowledge spillovers.

Question 11

When there are external economies of scale,an increase in the size of the market will

Accepted Answer

External economies of scale mean that as the industry grows, costs per unit decrease, encouraging more firms to enter the market and leading to lower prices.

Question 12

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

Accepted Answer

External economies of scale occur when businesses benefit from factors outside their control, such as improved infrastructure or a skilled labor pool, which can be facilitated by virtual economic communities.

Question 13

If a firm's output doubles when all inputs are doubled,production is said to occur under conditions of

Accepted Answer

When a firm's output doubles as all inputs are doubled, it is experiencing constant returns to scale, meaning the output increases proportionally with the increase in inputs.

Question 14

Where there are internal economies of scale,the scale of production possible in a country is constrained by

Accepted Answer

The answer of Where there are internal economies of scale,the...

Question 15

External economies of scale arise when the cost per unit

Accepted Answer

The answer of External economies of scale arise when the...

Question 16

The existence of external economies of scale

Accepted Answer

External economies of scale can occur in a perfectly competitive industry when the industry's expansion leads to cost advantages for all firms, such as through shared suppliers or improved infrastructure.

Question 17

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 .

Accepted Answer

In the presence of internal economies of scale, average production costs decrease as output increases due to efficiencies gained within the firm. With external economies of scale, average costs decrease as the industry grows, benefiting all firms.

Question 18

If output is increased in the long run,then in the presence of internal economies of scale the number of firms will ,and in the presence of constant external returns to scale the number of firms will .

Accepted Answer

The answer of If output is increased in the long...

Question 19

If a firm's output more than doubles when all inputs are doubled,production is said to occur under conditions of

Accepted Answer

Increasing returns to scale occur when a firm's output more than doubles as a result of doubling all inputs, indicating that the firm is becoming more efficient as it scales up production.

Question 20

If some industries exhibit internal increasing returns to scale in each country,we should not expect to see

Accepted Answer

Internal increasing returns to scale often lead to imperfect competition because firms can lower their average costs by increasing production, which can result in fewer firms dominating the market.

Quiz 7: External Economies of Scale and the International Location of Production

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 .

The existence of internal economies of scale

Internal economies of scale arise when the cost per unit

External economies of scale will average cost when output is by .

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 long- run market supply curve will be .

If a firm's output less than doubles when all inputs are doubled,production is said to occur under conditions of

One advantage of the specialization that results from international trade is that countries can take advantage of

Internal economies of scale will average cost when output is by .

If output is increased in the long run,average production costs in the presence of internal diseconomies of scale will ,and in the presence of external diseconomies of scale,will .

External economies of scale often arise because similar firms

When there are external economies of scale,an increase in the size of the market will

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

If a firm's output doubles when all inputs are doubled,production is said to occur under conditions of

Where there are internal economies of scale,the scale of production possible in a country is constrained by

External economies of scale arise when the cost per unit

The existence of external economies of scale

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 .

If output is increased in the long run,then in the presence of internal economies of scale the number of firms will ,and in the presence of constant external returns to scale the number of firms will .

If a firm's output more than doubles when all inputs are doubled,production is said to occur under conditions of

If some industries exhibit internal increasing returns to scale in each country,we should not expect to see