Question 1

Microsoft found that instead of producing a DVD player and a

gaming system separately, it is cheaper to incorporate DVD playing capabilities

in its new version of the gaming system.Microsoft is taking advantage of

economies of scope

decreasing marginal cost

economies of scale

learning curves

Question 2

What should you expect of an industry in which firms tend to

have economies of scale?

a small number of large firms

a large number of small firms, producing many highly similar

goods in a "crowded" market

a large number of large firms, producing the same product

a large number of small firms producing similar but

differentiated products

Question 3

The following numbers are the costs to produce Product A,

Product B, and Products A and B together.Which of the following exhibits

economies of scope?

100, 150, 250

100, 150, 15000

100, 150, 260

100, 150, 240

Question 4

Suppose marginal cost is less than average cost at a the current level of output.If output were to increase slightly from this level, then we should expect

average costs to decrease

fixed cost to decrease

marginal cost to decrease

average costs to increase

Flag question: Question 5

Question 5

What is expected to cause a firm to have diminishing marginal returns and increasing marginal costs?

if sunk costs and opportunity costs are ignored

if one factor of production is fixed in the short run

if fixed costs are less than variable costs

if average total costs are decreasing