Economies of Scale and Specialization Quiz

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What is the main advantage of lumpy resources and activities?

They enable firms to spread costs over larger volumes of output (correct)

They promote task specialization and division of labor

They allow firms to offer specialized expertise across a broad range of know-how

They lead to lower costs as a percentage of sales for market leaders

How does increased scale contribute to greater task specialization?

By enabling firms to spread costs over larger volumes of output

By promoting learning and automation in knowledge-intensive industries

By breaking down the production process into separate tasks performed by specialized workers (correct)

By allowing firms to offer specialized expertise across a broad range of know-how

What is the basis of the experience curve in creating cost advantage?

Offering specialized expertise across a broad range of know-how

Learning-by-doing and repetition that develops individual skills and organizational routines (correct)

Division of labor and task specialization in knowledge-intensive industries

Spreading costs over larger volumes of output to achieve economies of scale

How did Intel achieve dominance in the world microprocessor market?

By accumulating learning in the design and manufacture of microprocessors Signup and view all the answers

What was a major factor leading to increased unit costs for Boeing during 2006–2011?

Overtime pay and premiums for night and weekend shifts Signup and view all the answers

During the 2008–2009 recession, what was essential for survival in hard-hit sectors such as house building, construction equipment, and retailing?

Fast response to declining demand Signup and view all the answers

What do residual efficiencies relate to, according to the text?

The firm's approach to reaching its efficiency frontier Signup and view all the answers

Where do excess costs have a tendency to accumulate within a firm, according to the text?

Corporate headquarters Signup and view all the answers

What impact does underutilization of plant capacity have on unit costs?

It increases unit costs because fixed costs must be spread over fewer units of production. Signup and view all the answers

How does pushing output beyond normal full capacity impact unit costs?

It increases unit costs due to underutilization of resources. Signup and view all the answers

In what way does ownership of low-cost sources of material offer a cost advantage?

It reduces fixed costs by providing discounts on raw materials. Signup and view all the answers

How does the hourly rate in Chinese auto assembly plants compare to that in the US?

It is lower, resulting in significantly reduced fixed costs compared to the US. Signup and view all the answers

Economies of Scale and Specialization Quiz

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Questions and Answers

What is the main advantage of lumpy resources and activities?

How does increased scale contribute to greater task specialization?

What is the basis of the experience curve in creating cost advantage?

How did Intel achieve dominance in the world microprocessor market?

What was a major factor leading to increased unit costs for Boeing during 2006–2011?

During the 2008–2009 recession, what was essential for survival in hard-hit sectors such as house building, construction equipment, and retailing?

What do residual efficiencies relate to, according to the text?

Where do excess costs have a tendency to accumulate within a firm, according to the text?

What impact does underutilization of plant capacity have on unit costs?

How does pushing output beyond normal full capacity impact unit costs?

In what way does ownership of low-cost sources of material offer a cost advantage?

How does the hourly rate in Chinese auto assembly plants compare to that in the US?

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