Question

1. When a technology exhibits internal economies of scale,

average cost falls for the industry when firm's output increases.

average cost falls for each firm when industry output increases

firm's average cost falls when the firm's output increases.

firm's marginal cost falls when the firm's output increases.

2. When a technology exhibits external economies of scale

average cost falls for the industry when firms's output increases.

average cost falls for each firm when industry output increases.

firm's average cost falls when the firm's output increases.

firm's marginal cost falls when the firm's output increases.

3. Which of the following is an implication of internal economies of scale for market structure in the industry?

perfect competition

many small firms producing a homogenous product

imperfect competition

we cannot say

4. One of the determinants of external economies of scale in an industry is knowledge spillovers. In this context, this refers to

knowledge being an important component of technology.

knowledge begin an important input of production.

research and development

the informal exchange of information and ideas at a personal level.

Answer 1