EOS and DOS

Multiple Choice

Fill in the blank. Economies of scale is when as output _________, unit costs ________ in the long run.

• increases; decrease

• increases; increase

• decreases; increase

• decreases; decrease

Internal Economies of Scale

​Pick and write suitable EOS headings below after reading the descriptions

-Research and Development (R&D) EOS
-Marketing EOS
-Technical EOS
-Risk bearning EOS
-Managerial EOS
-Financial EOS
-Purchasing/Bulk buying EOS

Multiple Choice

Larger firms are better able to diversify into a range of product areas or markets and thus lessen their risk. This is an example of

• Financial economies of scale

• Technical economies of scale

• Managerial economies of scale

• Marketing economies of scale

• Risk bearing economies of scale

Multiple Choice

Large firms can afford to advertise and sell in larger quantities to develop brand loyalty. This is an example of

• Purchasing economies of scale

• Technical economies of scale

• Managerial economies of scale

• Marketing economies of scale

• Risk bearing economies of scale

Multiple Choice

Large firms can negotiate better interest rates on loans; this reduces the costs of borrowing for larger companies. This is an example of

• Financial economies of scale

• Technical economies of scale

• Managerial economies of scale

• Marketing economies of scale

• Risk bearing economies of scale

Multiple Choice

Large firms can buy raw materials in bulk at more favourable rates. This is an example of

• Purchasing economies of scale

• Technical economies of scale

• Managerial economies of scale

• Marketing economies of scale

• Risk bearing economies of scale

Multiple Choice

Fill in the blank. __________ economies of scale occur due to an increase in the scale of production within a single firm

• Internal

• External

• Complex

• Simple

Multiple Choice

Larger firms can hire specialists (e.g. managers, accountants) and are therefore able to increase productivity. This is an example of

• Purchasing economies of scale

• Technical economies of scale

• Managerial economies of scale

• Marketing economies of scale

• Risk bearing economies of scale

Multiple Choice

Machinery is likely to be efficient. what economies does it indicate?

• Financial Economies
• Buying Economies
• Technical Economies
• Managerial Economies

Multiple Choice

External economies of scale are cost savings available to the whole ________ as a result of its __________.

• Industry, Location
• Business, Location
  
• Industry, Size
• Business, Size

​Proximity to related firms
Availibility of skilled labours
Reputations of the geographical area
Access to transportation area

Multiple Choice

External economies of scale can arise from

• Bulk purchases of raw materials, parts and components at favorable prices by a particular business/firm

• Purchase and use of physical/human capital by a particular business/firm

• Greater availability of skilled laborers for a particular industry in a particular area

• A business/firm being able to obtain lower interest rates on loans

Multiple Choice

Which of the following is NOT a factor contributing to external economies of scale?

• Access to transportation network

• Financial EOS

• Reputation of the geographical area

• Availability of skilled labours

Multiple Choice

Diseconomies of Scale result in a lower per unit production cost over the long run

• True

• False

Multiple Choice

If a firm doubles its use of inputs and finds that output increases by 50%, then it has experienced

• Growth
• Economies of scale
• Diseconomies of scale
• Evolution

Open Ended

Explain the difference between internal and external economies of scale

Extension: providing one example for each

Open Ended

Identify two reasons why diseconomies of scale may occur in large organization.

Extension: explain with example

Open Ended

Reflect against Success criteria today on how well you understand the lesson and one question you still have