Economies of Scale

Internal economies of scale are those that

• Result from changes in production techniques

• Increase due to the growth of the industry as a whole

• Generate lower per unit production costs

• Reduce production costs in the short run

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

If a firm increases its use of all factors of production but sees an increase in its average costs, this is a sign of

• Internal diseconomies of scale
• External diseconomies of scale
  
• External economies of scale
  
• External diseconomies of scale

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

• True

• False

Internal diseconomies of scale can be caused by

• Being unable to purchase stocks at a discounted price

• Poor management being unable to effectively control a large workforce

• Traffic congestion causing delays to delivery of important stocks

• Advertising costs to a global audience

Internal economies of scale are those that

• Result from changes in production techniques
• Increase due to the growth of the industry as a whole
• Generate lower unit costs
• Reduce production costs in the short run

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

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

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

---------- resulting from a firm growing too large.

• External Diseconomies
• Internal Diseconomies
• Internal Economies
• External Economies

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

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