External economies of scale are enjoyed by a firm when: MCQ with Answer and Explanation

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External economies of scale are enjoyed by a firm when:

A. the entire industry expands

B. it merges with another firm

C. the firm increases its own size

D. it reduces prices

Answer: Option A

Solution (By JKSSB Mock Tests)

External economies arise from expansion of the industry as a whole, benefiting all firms.

This question belongs to: Economy GK Economy Set 1

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Practice More Economy Set 1 Questions

Question #1

The primary market deals with:

A. foreign currency

B. new issue of securities

C. trading of existing shares

D. only government bonds

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Correct Answer: Option B

Explanation:
The primary market deals with the issuance of new securities.

This question belongs to: Economy GK Economy Set 1

Question #2

The Liquidity Adjustment Facility of the RBI includes:

A. CRR and SLR

B. Bank rate and MSF

C. Currency printing and open market operations

D. Repo and reverse repo

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Correct Answer: Option D

Explanation:
The Liquidity Adjustment Facility comprises repo and reverse repo operations.

This question belongs to: Economy GK Economy Set 1

Question #3

Which of the following is an example of a positive externality in production?

A. Bee-keeping near an apple orchard

B. Congestion on public roads

C. Pollution from a factory

D. Noise from an airport

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Correct Answer: Option A

Explanation:
Bee-keeping provides pollination benefits to nearby apple orchards without compensation, representing a positive production externality.

This question belongs to: Economy GK Economy Set 1

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