4.1.4.5 Economies and Diseconomies of Scale VIDEO

What does a falling long-run average cost curve indicate?

• No change in returns

• Decreasing returns to scale

• Increasing returns to scale

• Variable returns to scale

What are the two types of economies of scale?

• Internal and external

• Primary and secondary

• Major and minor

• Direct and indirect

What does 'managerial economies of scale' refer to?

• All of the above

• Increased worker efficiency

• Specialized management roles

• Reduced material costs

How does technical economies of scale primarily help a firm?

• By reducing training costs

• By increasing productivity through technology

• By minimizing legal costs

• By enhancing distribution channels

How does employing specialist managers affect a firm's costs?

• Increases both costs and productivity

• Decreases costs but increases productivity

• Has no effect on costs or productivity

• Increases costs but decreases productivity

What is a key benefit of purchasing economies of scale?

• Improved product quality

• Lower unit costs through bulk buying

• Higher employee satisfaction

• Faster production times

How do marketing economies of scale benefit a firm?

• By reducing advertising costs per unit

• By increasing the price of goods

• By limiting market reach

• By focusing on local markets

What role does bulk buying play in economies of scale?

• Increases the variety of products available

• Reduces per unit cost of materials

• Leads to higher storage costs

• All of the above

What financial advantage do larger firms have?

• Less need for loans

• Lower interest rates on loans

• Higher employee wages

• More expensive insurance

How does risk bearing change as a firm grows?

• Stays the same

• Decreases as risks are spread out

• Is not affected by firm size

• Increases due to higher costs