If average costs of production decline with increases in output ...

[michelleunicorn]

If average costs of production decline with increases in output for a particular firm:
 a. many small firms will be more efficient than a single large firm.
  b. one large producer will be more efficient than many small producers.
  c. product diversification is necessary to spread the overhead.
  d. diseconomies of scale become significant as output increases.
  e. the variable cost of production must exceed the fixed costs.

Question 2

Assume that one day's labor in England can produce either 20 units of cloth or 2 units of wine, while in Portugal, one day's labor can produce either 24 units of cloth or 12 units of wine. If England transfers 2 units of labor from wine to cloth and Portugal transfers 1 unit of labor from cloth to wine, the increase in combined output by those two workers will be
 a. 16 wine, 8 cloth
 b. 16 wine, 16 cloth
  c. 12 wine, 12 cloth
  d. 8 wine, 16 cloth

[ktidd]

Answer to Question 1

b

Answer to Question 2

d