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NAKHLAH BCS
Name: ___________________________ , Class: _________________, Subject: Economics
Choose the best possible answer:
1) In August 2008, Infosys, an Indian information technology company, bought Axon, a UK information technology
company.
Which type of integration is this?
A) conglomerate
B) horizontal
C) vertical backward
D) vertical forward
2) What is usually an advantage of a small firm?
A) the ability to benefit from bulk buying arrangements
B) the ability to raise finance from a stock exchange
C) the ability to respond quickly to changes in consumer in consumer demand
D) the ability to run a national advertising campaign
3) Which change must occur when a firm starts to experience diseconomies of scale?
A) Average costs begin to rise
B) Employees are made redundant
C) Profits turn into losses
D) Variable costs become fixed
4) A toy company merges with a chemical company. What type of merger is this?
A) Conglomerate
B) Horizontal
C) Vertical merger backwards
D) Vertical merger forwards
5) To achieve horizontal integration a record company producing compact discs (CDs) could merge with another
firm. What would this firm most likely be doing?
A) owning shops selling CDs
B) producing CDs
C) producing CD players
D) producing machinery used in the making of CDs
6) Which is a diseconomy of scale?
A) Amalgamation
B) Diversification
C) Externalities
D) Vertical integration
7) What is a reason why firms making similar products sometimes locate near each other?
A) competition is decreased
B) there are external economies of scale
C) there are internal economies of scale
D) transport costs may be eliminated
8) The table shows the units of factors of production that a firm needs to employ for two different levels of output.
a) Explain two types of internal economy of scale that a growing bank can enjoy. [4]