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Homework answers / question archive / University of the Cumberlands MBA 531 Assignment Four Chapter 7 ECONOMIES SCALE AND SCOPE MULTIPLE CHOICE 1)The law of diminishing marginal productivity states that a
University of the Cumberlands
MBA 531
Assignment Four
Chapter 7 ECONOMIES SCALE AND SCOPE
MULTIPLE CHOICE
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
d. None of the above
2. Which one of the statements is true?
a. Diminishing returns is a long-run concept while decreasing returns to scale is a short-run concept. b. Diminishing returns is a short-run concept while decreasing returns to scale is a long-run concept.
c. Diminishing returns is a both short and long-run concept while decreasing returns to scale is a short- run concept.
d. Diminishing returns is a long-run concept while decreasing returns to scale is a short and long-run concept.
3. Which of the following statements describes the presence of diminishing returns? All else equal,
a. Marginal product is constant as output increases b. Marginal product is falling as output increases
c. Marginal product is rising as output increases
d. Marginal product is zero
4. The term “bottleneck” refers to
a. when increasing amounts of variable inputs must share a fixed input.
b. “fixity” of some factor of production
c. None of the above d. Both a and b
5. When a firm is experiencing increasing marginal costs, it implies
a. A constant marginal productivity
b. decreasing average costs
c. decreasing marginal productivity
d. increasing marginal productivity
6. If average cost is decreasing, then marginal cost
a. Must be increasing
b. Must be greater than average cost c. Must be less than average cost
d. None of the above
7. Marginal productivity is
a. The total output associated with total inputs
b. The total output associated with extra inputs
c. The extra output associated with total inputs d. The extra output associated with extra inputs
8. Economies of scale are also known as a. Increasing returns to scale
b. Decreasing returns to scale
c. Constant returns to scale
d. None of the above
9. All of these could be sources of economies of scale except
a. Investment in more efficient technology
b. Specialization
c. A bottleneck procedure
d. Discounts on bulk purchase of inputs
10. Diseconomies of scale are also known as
a. Increasing returns to scale b. Decreasing returns to scale
c. Constant returns to scale
d. None of the above
11. If your long-run costs exhibit increasing returns to scale, securing big orders leads you to
a. Increase average costs b. Reduce average costs
c. Keep the average costs constant
d. None of the above
12. As a table manufacturing company produces more tables, the average total cost of each table produced increases. This could be because:
a. Total fixed costs are decreasing as more tables are produced
b. There are economies of scale
c. There are diseconomies of scale
d. Total variable cost is decreasing as more tables are produced.
13. Eddys’ Electronics found that instead of producing a dvd player and a gaming system separately, it is cheaper to incorporate dvd playing capabilities in their new version of the gaming system. Eddy’s is taking advantage of
a. Economies of Scale
b. Learning curve
c. Economies of Scope
d. Decreasing marginal costs
14. What is a synergy or cost complementarity?
a. the cost of producing different products offered by separate companies would be more expensive when produced by one company
b. the cost of producing different products offered by separate companies is higher than when produced by one company
c. the cost of producing different products offered by separate companies is equal to when the products are produced by one company
d. None of the above
15. What are economies of scope?
a. the cost of producing two products jointly by one firm is more than the cost of producing them separately
b. the cost of producing two products jointly by one firm is lesser than the cost of producing them separately
c. the cost of producing two products jointly by one firm is equal to the cost of producing them separately
d. none of the above
SHORT ESSAYS
1. Two of UK’s larger wine distribution companies, Bibendum and PLB, merged their businesses in October 2014. Bibendum is primarily a restaurant supplier while PLB focuses on supplying wines to retailers. Does this suggest a mechanism through which the merger might create value?
2. What is the difference between economies of scale and economies of scope
