External economies of scale arise when the cost per unit

• falls as the industry grows larger and rises as the average firm grows larger.

• rises as the industry grows larger and falls as the average firm grows larger.

• falls as the industry and the average firm grows larger.

• remains constant over a broad range of output.

• rises as the industry and the average firm grows larger.

Internal economies of scale arise when the cost per unit

• falls as the average firm grows larger

• rises as the industry grows larger.

• falls as the industry grows larger.

• rises as the average firm grows larger.

• remains constant over a broad range of output.

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

• the size of the domestic plus the foreign market.

• the size of the country.

• the size of the trading partner's country.

• the size of the domestic market.

• the size of the foreign market.

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

conditions of

• increasing returns to scale.

• imperfect competition.

• intra-industry equilibrium.

• constant returns to scale

• decreasing returns to scale.

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

of

• scale economies.

• production diversification

• smaller countries.

• taste reversals.

• lower transport costs.

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

• constant returns to scale

• imperfect competition.

• intra-industry equilibrium.

• increasing returns to scale.

• decreasing returns to scale.

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

of

• decreasing returns to scale.

• constant returns to scale

• intra-industry equilibrium.

• increasing returns to scale.

• imperfect competition.

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

• reduce; increased; a firm

• increase; increased; a firm

• reduce; increased; the industry

• increase; increased; the industry

• reduce; reduce; the industry

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

• reduce; increased; the industry

• reduce; increased; a firm

• increase; increased; a firm

• increase; increased; the industry

• reduce; reduce; the industry

The existence of external economies of scale

• may be associated with a perfectly competitive industry.

• cannot be associated with a perfectly competitive industry.

• tends to result in one huge monopoly.

• tends to result in large profits for each firm.

• focuses more on individual firms than the industry as a whole.