Worksheets3. Production, Costs and Revenue - Year 1
Total questions: 10
Worksheet time: 10mins
Which one of the following is most likely to discourage the growth of a firm? The existence of
diseconomies of scale at low levels of output.
large economies of scale at low levels of output.
large economies of scale at low levels of output.
competing firms in the same industry
A company wishes to increase labour productivity. All other things being equal, this is most likely to be achieved if the company
employs more workers.
reduces the wages it pays its employees.
reduces current output.
invests in more capital equipment.
All other things being equal, which one of the following is most likely to discourage the growth of a firm?
Marketing economies of scale at high levels of output
Low unit costs of production compared with competing firms
An increase in market power at high levels of output
Diseconomies of scale at low levels of output
Specialisation requires the existence of
economies of scale.
economic efficiency
a system of exchange.
rising productivity.
All other things being equal, which one of the following situations always results in a rise in labour productivity?
Output falls at a slower rate than the fall in the number of workers employed
Output falls at a faster rate than the fall in the number of workers employed
Output rises at a slower rate than the rise in the number of workers employed
Output always rises as the number of workers employed increases
remains constant
falls over the whole range
rises at first and then falls.
falls at first and then rises
3
5
7
63
the total output of all workers was highest in 2012
productivity changed at its fastest rate between 2008 and 2009.
the numbers of workers employed was higher in 2012 than in 2010.
the amount produced per worker rose fastest between 2011 and 2012.
In an economy, some industries are dominated by a few large firms. Which one of the following is most likely to explain this situation?
In the economy...
small producers are likely to suffer from diseconomies of scale.
as industries increase their output, firms are likely to be able to charge a higher price for their products.
as firms increase their size, the employment of specialist managers may result in a fall in the average cost of running a business.
small firms find it hard to compete because, as firms increase their output, the rise in employment is likely to reduce labour productivity.
Diseconomies of scale might arise because
firms spend money on new technology which leads to lower average costs.
decision-making by management becomes more difficult in larger firms.
workers are more likely to be productively efficient in larger firms.
larger firms can buy in bulk.
