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 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

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

Economies of scale are gained when a business...

• decreases it's production and causes an increase in average production costs

• increases it's production and causes a decrease in average production costs

• maintains production levels and causes an increase in average production costs

• increases it's production and causes an increase in average production costs

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

• Financial Economies

• Buying Economies

• Technical Economies

• Managerial Economies

Trade based on economies of scale reveals that the movement from autarky point to the higher indifference curve because of ____

• Economies of scale

• Constant return to scale

• Economies of scope

• Incomplete specialization

Identify why trade based on economies of scale assume single production possibility frontier?

• Because of commodity X and Y are homogeneous

• Because of two nations are identical in every respect

• Technological gap exist

• None of above

Why trade based on economies of scale assume convex production possibility frontier?

• increasing return to scale

• decreasing return to scale

• constant return to scale

• None of above

Identify statement that reflect the trade based on economies of scale

• complete specialization

• incomplete specialization

• economies of scale

• constant return to scale

• constant production possibility frontier