L6: Economies of Scale

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Test your understanding of scale effects in trade and industry.

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Emma

Sweden

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L6: Economies of Scale


Froggy Jumps L6: Economies of ScaleVersion en ligne Test your understanding of scale effects in trade and industry. par Emma 1 What is economies of scale? a Costs stay the same with more output b Higher fixed costs per unit c Lower average costs as output grows 2 External economies of scale occur when cost per unit depends on the a Individual worker skills b Size of the firm c Size of the industry 3 Internal economies of scale occur when cost per unit falls as a Firm size increases b Industry size grows c Output prices rise 4 Which is more consistent with industry-wide clusters like Silicon Valley? a Constant returns to scale b External economies of scale c Internal economies of scale 5 What can first-mover advantage create in external economies? a Immediate price convergence b Elimination of all future costs c Persistent industry location advantages 6 Under external economies, how do prices tend to move with trade? a Prices can fall below autarky levels b Prices rise above autarky levels c Prices stay exactly at autarky levels 7 Which factor helps explain Antwerp’s diamond industry cluster? a External economies of scale b Internal economies of scale c No economies of scale 8 What is infant industry protection often used to justify? a Temporary tariffs to gain experience b Free trade without exceptions c Permanent subsidies to all firms 9 Rybczynski theorem deals with changes in the: a Total amount of capital b Demand for goods c Total population 10 Rybczynski predicts that increasing capital shifts production toward which good? a Both equally b Capital-intensive good c Labor-intensive good 11 Which of the following is a reason for trade beyond tech differences? a Geography only b No trade ever occurs c Economies of scale 12 Which model pairing contrasts traditional and modern trade theory? a Monopolistic competition vs perfect competition b Ricardo vs Heckscher-Ohlin c Gravity model vs tariff model 13 What role does demand play in external economies of scale trade? a Shifts world demand curve right b Keeps demand fixed c Halves global demand 14 Which is a potential welfare outcome of external economies with trade? a Welfare may fall relative to autarky b Always equals autarky welfare c Always rises 15 Which example illustrates external economies in practice? a A single farmer market b Isolated artisanal craft shop c Silicon Valley chip industry 16 What is a misallocation risk with external economies? a No risk at all b Perfect competition always fixes it c Historical accidents biasing production 17 Which continuum best fits the idea of ‘external economies’? a Industry size matters for costs b Firm-specific size matters only c Individual skill is the sole driver 18 Which phenomenon can protect domestic producers temporarily? a Tariffs or infant industry protection b Immediate free trade c Elimination of patent rights 19 Which historical sector is cited as an example of scale-driven transformation? a Small farm to dairy monopoly b Textile mills to national banks c Hollywood’s growth from film to integrated industry 20 What happens to supply curves when industry output expands externally? a Forward-falling supply curve b Flat supply curve c Backward-bending supply curve 21 Under internal economies of scale, industrial structure tends to be: a Perfectly competitive b Imperfectly competitive c Monopoly-free market

L6: Economies of Scale

Froggy Jumps

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L6: Economies of ScaleVersion en ligne

par Emma

What is economies of scale?

External economies of scale occur when cost per unit depends on the

Internal economies of scale occur when cost per unit falls as

Which is more consistent with industry-wide clusters like Silicon Valley?

What can first-mover advantage create in external economies?

Under external economies, how do prices tend to move with trade?

Which factor helps explain Antwerp’s diamond industry cluster?

What is infant industry protection often used to justify?

Rybczynski theorem deals with changes in the:

Rybczynski predicts that increasing capital shifts production toward which good?

Which of the following is a reason for trade beyond tech differences?

Which model pairing contrasts traditional and modern trade theory?

What role does demand play in external economies of scale trade?

Which is a potential welfare outcome of external economies with trade?

Which example illustrates external economies in practice?

What is a misallocation risk with external economies?

Which continuum best fits the idea of ‘external economies’?

Which phenomenon can protect domestic producers temporarily?

Which historical sector is cited as an example of scale-driven transformation?

What happens to supply curves when industry output expands externally?

Under internal economies of scale, industrial structure tends to be: