Technology, Production, And Costs Practice Problems Microeconomics Worksheet Page 7

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34. Over the past twenty years, the number of small family farms has fallen significantly and in
their place there are fewer, but larger, farms owned by corporations. Which of the following best
explains this trend?
A) diseconomies of scale in farming
B) economies of scale in farming
C) diminishing returns to labor in farming
D) declining productivity
35. The president of Toyota's Georgetown plant was quoted as saying, "Demand for high
volumes saps your energy. Over a period of time, it eroded our focus [and] thinned out the
expertise and knowledge we painstakingly built up over the years." This quote suggests that
A) Toyota was experiencing an excess demand for its automobiles which it had difficulty
keeping up with.
B) as Toyota expanded its capacity, it experienced diseconomies of scale.
C) Toyota was focused on "churning" out cars for which it did not invest sufficiently in training
its workers.
D) high demand for Toyota's cars prevented the company from focusing on its strength: auto
design.

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