Advantages And Disadvantages of Scale of Production - SS1 Economics Past Questions & Answers - page 1

1

What is an advantage of a larger scale of production?

A

Higher flexibility

 

 

 

B

Lower cost per unit of production 

C

Less market power

D

Less access to finance

CORRECT OPTION: b
2

What is a disadvantage of a larger scale of production?

A

High fixed costs

B

Easy adaptability to changes in the market

 

 

C

Fewer communication problems

D

Quick decision-making

CORRECT OPTION: a
3

What do economies of scale mean?

A

The cost per unit of production decreases as production volume increases

B

The cost per unit of production increases as production volume increases

 

C

The cost per unit of production stays the same regardless of production volume

D

None of the above

 

CORRECT OPTION: a
4

What is the disadvantage of diseconomies of scale?

A

The cost per unit of production decreases

B

The cost per unit of production increases

 

 

 

C

The cost per unit of production stays the same

D

None of the above

CORRECT OPTION: b
5

What is an advantage of a larger business's access to finance?

A

More difficulty in securing financing

 

 

B

Easier access to financing

C

The same level of access to financing as smaller businesses

D

None of the above

 

CORRECT OPTION: b
6

What is an example of a disadvantage of a larger scale of production?

 

 

Lack of flexibility - As businesses grow, they become less flexible and may struggle to adapt to changes in the market or to customer needs.

7

What is an example of an advantage of a larger business's access to finance?

 

Innovation and technological advancement - Large businesses can invest more in research and development, innovation, and technology, allowing them to stay ahead of the competition.

 

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