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1
Adam Smith observed that the division of labour is limited by the size of the market. Which one of the following statements is not consistent with this observation?
A)A limited-sized market can prevent firms from achieving economic capacity.
B)A limited-sized market can prevent firms from achieving their minimum efficient scale.
C)A limited-sized market can prevent firms from achieving minimum short-run average cost.
D)A limited-sized market can prevent firms from achieving minimum long-run average cost.
E)A limited-sized market can prevent firms from achieving excess capacity.
2
All of the following, except one, are possible explanations for why large-scale operations may not be as important for firms in many industries in the future.
A)Economies of scale are becoming less important in some industries because of new technology.
B)Financial capital is now more readily available to small firms than it used to be.
C)Consumer demand is shifting toward more customized products.
D)Very large, established firms are often less flexible.
E)Small firms can advertise their products on TV for a per-unit cost that is just as inexpensive as large firms.





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