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MGEC40H3 Study Guide - Standard Streams, Externality, Takers

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School
UTSC
Department
Economics for Management Studies
Course
MGEC40H3
Professor
Jack Parkinson

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Document Summary

Outline: horizontal boundaries (of the firm: scale/scope of economies (defn + sources, learning curve/ learning economies (defn + sources) Horizontal boundaries refer to the amount of output. Ex: how much of the product market it serves (market share) Vertical boundaries refer to the portion of the output (along the chain of production) that the firm does for itself (rather than outsourcing) Ex: part of a pen 905,89. 42:. 84:984:7. 0/. Outline: sources of diseconomies (of scale/scope, vertical boundaries of the firm. Make or buy decision benefits & costs of using the market. Feedback may occur into any of the previous processes. Scales economies are more likely to occur more than learning economies. Simple production process, but need large amount of capital, high fixed costs. Ex: many automated processes, no learning needed. Labour intensive, complex processes, not a lot of fixed costs, learning occurs. Ex: using ones brain, experience, creativity, low cost, lots of learning.

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Related Questions

Which of the following statements is true about economies of scale? Select one:

a. Economies of scale refer to cost savings that come from learning by doing.

b. Attaining economies of scale increases a firm's profitability.

c. Economies of scale lead to an increase in the average unit cost of a product.

d. Economies of scale result due to the increase in the perceived value of a product.

e. The ability to spread variable costs over a large volume is a source of economies of scale

A production possibilities frontier that is a​ downward-sloping straight line implies:

1. no economies of scope,

2. diseconomies of scale,

3. economies of scale,

4. economies of scope.

Which of the following is not a potential source of diseconomies of scale?

A) Physical limits to the efficient size

B) Worker de-motivation

C) Learning-curve economies

D) Decrease in the wage rate