Question 1

​What is a synergy or cost complementarity?

Accepted Answer

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 
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 B

Question 2

​A food company trying to increase its profits by expanding in to the soft drinks business is an example of

Accepted Answer

A) ​Economies of scale 
B) Economies of Scope 
C) Diseconomies of Scale 
D) ​Diseconomies of Scope 
A) ​Economies of scale 
B) Economies of Scope 
C) Diseconomies of Scale 
D) ​Diseconomies of Scope B

Question 3

​The law of diminishing marginal productivity states that

Accepted Answer

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 
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 B

Question 4

​What are economies of scope?

Accepted Answer

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 
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

Question 5

​An airlines realizes that instead of offering free checked in baggage,they could put a charge on checked baggage without the demand for the tickets decreasing.The space saved can be used to carry priority mail packages,with hardly any additional costs.The airlines has realized

Accepted Answer

A) ​Economies of scale 
B) Economies of scope 
C) Diseconomies of scale 
D) ​Diseconomies of scope 
A) ​Economies of scale 
B) Economies of scope 
C) Diseconomies of scale 
D) ​Diseconomies of scope

Question 6

​You would expect that your firm is experiencing decreasing returns to scale if

Accepted Answer

A) ​Long run average costs increase with output 
B) Long run average costs decrease with output 
C) Long run average costs are constant with respect to output 
D) ​None of the above 
A) ​Long run average costs increase with output 
B) Long run average costs decrease with output 
C) Long run average costs are constant with respect to output 
D) ​None of the above

Question 7

​If marginal costs rises above average costs,average costs must

Accepted Answer

A) ​Be increasing 
B) Be decreasing 
C) Stay constant 
D) ​None of the above 
A) ​Be increasing 
B) Be decreasing 
C) Stay constant 
D) ​None of the above

Question 8

When a firm is experiencing increasing marginal costs,it implies​

Accepted Answer

A) ​A constant marginal productivity 
B) decreasing average costs 
C) decreasing marginal productivity 
D) ​increasing marginal productivity 
A) ​A constant marginal productivity 
B) decreasing average costs 
C) decreasing marginal productivity 
D) ​increasing marginal productivity

Question 9

The ability to lower the average costs of production as the quantity produced increases is called​

Accepted Answer

A) ​Economies of scale 
B) Economies of scope 
C) Diseconomies of scale 
D) ​Diseconomies of scope 
A) ​Economies of scale 
B) Economies of scope 
C) Diseconomies of scale 
D) ​Diseconomies of scope

Question 10

Diminishing marginal productivity can occur due to the following reason(s)​

Accepted Answer

A) ​the difficulty of monitoring and motivating larger workforces 
B) the increasing complexity of larger systems 
C) the "fixity" or permanence of some factor of production 
D) ​all of the above 
A) ​the difficulty of monitoring and motivating larger workforces 
B) the increasing complexity of larger systems 
C) the "fixity" or permanence of some factor of production 
D) ​all of the above

Question 11

​What are diseconomies of scope?

Accepted Answer

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 
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

Question 12

Average costs curves rise with production ​

Accepted Answer

A) ​Due to declining average fixed costs 
B) Due to rising average fixed costs 
C) Due to marginal costs being less than average costs 
D) ​Due to rising marginal costs 
A) ​Due to declining average fixed costs 
B) Due to rising average fixed costs 
C) Due to marginal costs being less than average costs 
D) ​Due to rising marginal costs

Question 13

​Average costs

Accepted Answer

A) ​fall at all levels of output 
B) are falling when marginal costs are below average costs and rising when marginal costs are above average costs 
C) are falling when marginal costs are above average costs and rising when marginal costs are below average costs 
D) ​does not vary with output 
A) ​fall at all levels of output 
B) are falling when marginal costs are below average costs and rising when marginal costs are above average costs 
C) are falling when marginal costs are above average costs and rising when marginal costs are below average costs 
D) ​does not vary with output

Question 14

​The ability to lower the average costs over total production as more products are introduced

Accepted Answer

A) ​Economies of scale 
B) Economies of Scope 
C) Diseconomies of Scale 
D) ​Diseconomies of Scope 
A) ​Economies of scale 
B) Economies of Scope 
C) Diseconomies of Scale 
D) ​Diseconomies of Scope

Question 15

​All the factors below are causes of diminishing marginal returns,except

Accepted Answer

A) ​Difficulty of monitoring and motivating larger workforces 
B) Increasing complexity of larger systems 
C) Specialization and division of Labor 
D) ​The "fixity' of some factor 
A) ​Difficulty of monitoring and motivating larger workforces 
B) Increasing complexity of larger systems 
C) Specialization and division of Labor 
D) ​The "fixity' of some factor

Question 16

​Which of these statements are FALSE

Accepted Answer

A) ​If production exhibits diseconomies of scope,firm should reduce the number of products to reduce costs. 
B) If production exhibits diseconomies of scope,firm should increase the number of products to reduce costs. 
C) If production exhibits economies of scope,firm should increase the number of products to reduce costs. 
D) ​If production exhibits economies of scope,firm should increase the number of products to reduce costs. 
A) ​If production exhibits diseconomies of scope,firm should reduce the number of products to reduce costs. 
B) If production exhibits diseconomies of scope,firm should increase the number of products to reduce costs. 
C) If production exhibits economies of scope,firm should increase the number of products to reduce costs. 
D) ​If production exhibits economies of scope,firm should increase the number of products to reduce costs.

Question 17

Wine Distribution Merger
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?​

Accepted Answer

The merged firm could eke out some econo

Question 18

​If long run average costs rise with output,you have

Accepted Answer

A) ​Increasing returns to scale 
B) Decreasing returns to scale 
C) Constant returns to scale 
D) ​None of the above 
A) ​Increasing returns to scale 
B) Decreasing returns to scale 
C) Constant returns to scale 
D) ​None of the above

Question 19

​A food truck operator originally produced hamburgers and hotdogs.To serve the tastes of their various customers,the hot dog vendor decides to start producing turkey dogs and ham sandwiches as well.Since the new products were introduced,average costs rose dramatically.The vendor is experiencing

Accepted Answer

A) ​Economies of scale 
B) Economies of scope 
C) Diseconomies of scale 
D) ​Diseconomies of scope 
A) ​Economies of scale 
B) Economies of scope 
C) Diseconomies of scale 
D) ​Diseconomies of scope

Question 20

If average cost is decreasing,then marginal cost ​

Accepted Answer

A) ​Must be increasing 
B) Must be greater than average cost 
C) Must be less than average cost 
D) ​None of the above 
A) ​Must be increasing 
B) Must be greater than average cost 
C) Must be less than average cost 
D) ​None of the above

Exam 6: Economies of Scale and Scope

​What is a synergy or cost complementarity?

​A food company trying to increase its profits by expanding in to the soft drinks business is an example of

​The law of diminishing marginal productivity states that

​What are economies of scope?

​An airlines realizes that instead of offering free checked in baggage,they could put a charge on checked baggage without the demand for the tickets decreasing.The space saved can be used to carry priority mail packages,with hardly any additional costs.The airlines has realized

​You would expect that your firm is experiencing decreasing returns to scale if

​If marginal costs rises above average costs,average costs must

When a firm is experiencing increasing marginal costs,it implies​

The ability to lower the average costs of production as the quantity produced increases is called​

Diminishing marginal productivity can occur due to the following reason(s)​

​What are diseconomies of scope?

Average costs curves rise with production ​

​Average costs

​The ability to lower the average costs over total production as more products are introduced

​All the factors below are causes of diminishing marginal returns,except

​Which of these statements are FALSE

​If long run average costs rise with output,you have

​A food truck operator originally produced hamburgers and hotdogs.To serve the tastes of their various customers,the hot dog vendor decides to start producing turkey dogs and ham sandwiches as well.Since the new products were introduced,average costs rose dramatically.The vendor is experiencing

If average cost is decreasing,then marginal cost ​

The One Lessor of Business

Benefits, Costs, and Decisions

Extent How Much Decisions

Investment Decisions: Look Ahead and Reason Back

Simple Pricing

Understanding Markets and Industry Changes

Market Structure and Long Run Equilibrium

Strategy: the Quest to Keep Profit From Eroding

Foreign Exchange, Trade, and Bubbles

More Realistic and Complex Pricing

Direct Price Discrimination

Strategic Games

Bargaining

Making Decisions With Uncertainty

Auctions

The Problem of Adverse Selection

The Problem of Moral Hazard

Getting Employees to Work in the Firms Best Interest

Getting Divisions to Work in the Firms Best Interest

Managing Vertical Relationships

Filters

What is a synergy or cost complementarity?

A food company trying to increase its profits by expanding in to the soft drinks business is an example of

The law of diminishing marginal productivity states that

What are economies of scope?

An airlines realizes that instead of offering free checked in baggage,they could put a charge on checked baggage without the demand for the tickets decreasing.The space saved can be used to carry priority mail packages,with hardly any additional costs.The airlines has realized

You would expect that your firm is experiencing decreasing returns to scale if

If marginal costs rises above average costs,average costs must

When a firm is experiencing increasing marginal costs,it implies

The ability to lower the average costs of production as the quantity produced increases is called

Diminishing marginal productivity can occur due to the following reason(s)

What are diseconomies of scope?

Average costs curves rise with production

Average costs

The ability to lower the average costs over total production as more products are introduced

All the factors below are causes of diminishing marginal returns,except

Which of these statements are FALSE

If long run average costs rise with output,you have

A food truck operator originally produced hamburgers and hotdogs.To serve the tastes of their various customers,the hot dog vendor decides to start producing turkey dogs and ham sandwiches as well.Since the new products were introduced,average costs rose dramatically.The vendor is experiencing

If average cost is decreasing,then marginal cost