1. The law of diminishing marginal productivity states that
a. As you expand output, your marginal productivity eventually increases
b. As you expand output, your marginal productivity eventually declines
c. As you expand output, the total product eventually increases
2. What are economies of scale?
a. decreasing average costs as production increases
b. increasing average costs as production increases
c. increasing fixed costs as production increases
d. None of the above
3. What are economies of scope?
a. lower average costs when multiple different products are produced
b. higher average costs when multiple different products are produced
c. Constant average costs when multiple different products are produced
d. None of the above
4. It costs firm A $800 to produce five radios and it costs firm B $500 to produce five batteries. If Firm A merges with firm B, it can produce both the five radios and the five batteries for $1000. The firm has experienced
a. Economies of scale
b. Economies of scope
c. Diseconomies of scale
d. Diseconomies of scope
5. It costs firm A $800 to produce five radios and it costs firm B $500 to produce five batteries. If Firm A merges with firm B, it can produce both the five radios and the five batteries for $1500. The firm has experienced
a. Economies of scale
b. Economies of scope
c. Diseconomies of scale
d. Diseconomies of scope
1. The law of diminishing marginal productivity states that
a. As you expand output, your marginal productivity eventually increases
b. As you expand output, your marginal productivity eventually declines
c. As you expand output, the total product eventually increases
2. What are economies of scale?
a. decreasing average costs as production increases
b. increasing average costs as production increases
c. increasing fixed costs as production increases
d. None of the above
3. What are economies of scope?
a. lower average costs when multiple different products are produced
b. higher average costs when multiple different products are produced
c. Constant average costs when multiple different products are produced
d. None of the above
4. It costs firm A $800 to produce five radios and it costs firm B $500 to produce five batteries. If Firm A merges with firm B, it can produce both the five radios and the five batteries for $1000. The firm has experienced
a. Economies of scale
b. Economies of scope
c. Diseconomies of scale
d. Diseconomies of scope
5. It costs firm A $800 to produce five radios and it costs firm B $500 to produce five batteries. If Firm A merges with firm B, it can produce both the five radios and the five batteries for $1500. The firm has experienced
a. Economies of scale
b. Economies of scope
c. Diseconomies of scale
d. Diseconomies of scope
