1. Adam Smith used a famous example of what type of firm to illustrate economies of scale?
a.
Apple
b.
a pin factory
c.
a lumber mill
d.
a British university
2. In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith described a visit he made to
a
a.
car factory.
b.
pin factory.
c.
washing machine factory.
d.
farm.
3. In his book, An Inquiry into the Nature and Causes of the Wealth of Nations, Adam Smith credits economies of scale to
a.
competition.
b.
opportunity costs.
c.
specialization.
d.
incentives.
4. In setting the production level, a firm’s cost curves
a.
by themselves do not tell us what decisions the firm will make.
b.
dictate what decisions the firm will make.
c.
have no bearing on what decisions the firm will make.
d.
None of the above is correct.