How much do you know about Small and Medium-sized Enterprises?

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Questions and Answers

What is the definition of 'small' and 'medium sized' enterprises (SME) in a European perspective?

  • Enterprises with less than 250 employees (correct)
  • Enterprises with less than 1000 employees
  • Enterprises with less than 500 employees
  • Enterprises with less than 100 employees

What was the reason for the growing interest in small and medium sized firms over the last decade?

  • The emphasis on the Enterprise Culture by the Conservative government (correct)
  • The emphasis on the Welfare Culture by the Conservative government
  • The emphasis on the Welfare Culture by the Labour government
  • The emphasis on the Enterprise Culture by the Labour government

Why are small firms dominant in retail distribution and personal services?

  • Because they have a better marketing strategy
  • Because they have a large number of employees
  • Because they face low entry barriers (correct)
  • Because they have economies of scale

What did Margaret Thatcher say about small businesses in 1984?

<p>The more small businesses there are, the more enterprising that society is bound to be (A)</p> Signup and view all the answers

What is the reason for some firms to have a small optimum efficient plant size?

<p>Economies of scale are not important in the industry (C)</p> Signup and view all the answers

What is the principal-agent problem in public companies?

<p>The problem of information asymmetry and misaligned incentives between shareholders and CEOs/senior managers (D)</p> Signup and view all the answers

What is X-inefficiency?

<p>The inefficiency that arises when a firm produces at a larger scale than it could (A)</p> Signup and view all the answers

What advantage do small firms have over large firms in filling niche markets?

<p>Small firms can adapt their size to meet demand in niche markets (B)</p> Signup and view all the answers

What is Allocative inefficiency?

<p>The inefficiency that arises when a firm produces at the same scale as it could (B)</p> Signup and view all the answers

What is one way that small firms can gain the advantages of bulk-buying while still retaining their independence?

<p>Co-operatives (B)</p> Signup and view all the answers

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