Font size
WorksheetsTHEME 3: CRP + BUS OBJ + EFF
Total questions: 15
Worksheet time: 8mins
Internal economies of scale occurs when.......
LRMC falls as output rises
LRAC falls as output falls
LRAC falls as there is a growth in the entire industry
LRAC falls as output rises
LRAC rises as output rises
Which of the following is NOT an example of INTERNAL ECONOMIES OF SCALE?
Purchasing
Cooperation
Managerial
Technical
Financial
Increasing returns to scale means......
% change in factor inputs = % change in output
% change in factor inputs > % change in output
% change in factor inputs < % change in output
% change in revenue > % change in costs
% change in quantity > % change in price
External economies of scale is where LRAC falls when.......
the firm grows
the economy grows
the economy contracts
the industry grows
the firm declines
The minimum efficient scale is the.................
scale of output where internal economies of scale have been fully exploited
scale of output where external economies of scale have been fully exploited
scale of output where diseconomies of scale have been fully exploited
scale of output where profit is maximised
scale of output where revenue is maximised
If you are producing beyond the point MR=MC which of the following would be true?
There is a marginal loss of one extra unit of production
There is a marginal profit on one extra unit of production
Supernormal profits would rise
Revenue would continue to rise with output
Marginal profit would be zero
What would happen to price and quantity if you move from profit max output to rev max output?
fall, fall
fall, rise
rise, rise
rise, fall
none of the above
What form of profit will you be making if you sales maximise?
Impossible to say
Loss
Supernormal profit where AR<AC
Supernormal profit where AR>AC
Normal profit
If a firm is profit satisficing between which two levels of output will they be operating?
profit max and sales max
profit max and rev max
rev max and all efficiency
prod efficiency and all efficiency
Why would a firm adopt sales max as a strategy?
To max profit
To satisfy shareholders
To max revenue
To increase market share
To price at point of allocative efficiency
What is the formula for allocative efficiency?
P=AFC
P=MC
MR=MC
TC=TR
AR=AC
At what output level would a firm operate at prod efficiency?
Max TR
MR=0
MR=MC
MIN AC
AR=MC
Emily is the new CEO of Microsoft. Overtime the company draws on existing supernormal profits to invest in product innovation. This strategy is an example of what type of efficiency?
X efficicency
Allocative efficiency
Productive efficiency
Dynamic efficiency
Social efficiency
Cooper is a manager in a large company with monopoly power. He manages a team of inefficient workers but he decides to keep them on because they have worked for the company for many years. This is an example of?
Productive inefficiency
Allocative inefficiency
X inefficiency
Dynamic inefficiency
X efficiency
Which of the following markets is the best example of a perfectly competitive market?
Supermarket industry
Car industry
Hairdressing industry
Mobile phone industry
Agricultural industry
