IGCSE Econs - the firm 6qs

How is a government most likely to prevent the growth of monopolies?

• by encouraging mergers in the private sector

• by establishing nationalised industries

• by promoting the benefits of economies of scale

• by reducing barriers to entry into an industry

The following information refers to a firm producing shoes. At which level of output does the firm maximise profits?

• A

• B

• C

• D

When do economies of scale take place?

• in the short run

• if variable factors become fixed

• when all factors of production are fixed

• when all factors of production are variable

A firm produces 1000 units and has a total cost of $50 000.

The variable cost per unit produced is $40.

What is the total fixed cost of the firm?

• $1000

• $4000

• $10000

• $40000

Firms can grow by increasing the internal scale of their operations.

What might be a disadvantage of this to the firm?

• average cost begins to fall

• it is difficult to motivate workers

• labour is replaced by robots

• markets become global

A government owns and runs an airline.

Which combination of ownership and sector is this?

• A

• B

• C

• D