WorksheetsEconomies of scale
Total questions: 22
Worksheet time: 20mins
Fill in the blank. Economies of scale is when as output _________, unit costs ________ in the long run.
increases; decrease
increases; increase
decreases; increase
decreases; decrease
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
Larger firms are better able to diversify into a range of product areas or markets and thus lessen their risk. This is an example of
Financial economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Large firms can negotiate better interest rates on loans; this reduces the costs of borrowing for larger companies. This is an example of
Financial economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Large firms can buy raw materials in bulk at more favourable rates. This is an example of
Purchasing economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Fill in the blank. __________ economies of scale occur due to an increase in the scale of production within a single firm
Internal
External
Complex
Simple
Larger firms can hire specialists (e.g. managers, accountants) and are therefore able to increase productivity. This is an example of
Purchasing economies of scale
Technical economies of scale
Managerial economies of scale
Marketing economies of scale
Risk bearing economies of scale
Which of the following EOS refers to improving the production process?
Financial
Managerial
Technical
Purchasing
Machinery is likely to be efficient. what economies does it indicate?
How many different types of economies of scale are there
1
2
3
4
The difference between the revenue earned and the costs incurred by a business during a specific period of time is called _____.
Sales
Profit
Expenses
Costs
The table below gives information about Business A. Based on this information, Business A’s total fixed costs are:
£10,000
£30,000
£40,000
£70,000
Which of the following has the highest position in the company?
Regional Manager
Directors
CEO
workers
Discuss the relationship between economies of scale and competitive advantage.
Economies of scale can lead to cost advantages for companies, which can then be used to gain a competitive edge in the market.
Economies of scale only benefit small companies
Economies of scale have no impact on competitive advantage
Competitive advantage has no relation to economies of scale
Which of the following leads to internal dis-economies of scale
Bureaucracy
Increasing market rents in certain areas
Lack of communication in a large organization
Diversification
Traffic congestion
Which of the following are examples of fixed costs?
Loan payment
Entertainment
Rent
Weekly payroll
Pet expenses
