［2008］Topic 59: Technology and Other Operational Risks相关习题 average, service, affect

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AIM 5: Analyze how operational economics of scale and economics of scope can affect operational risks.

 

1、A bank can service 1,000 loans for an average cost of $362 per year, per loan. If the bank can service 5,000 loans for an average cost of $298 per year, per loan, the servicing is said to have:

A) economies of scale.
 
B) economies of scope.
 
C) synergy of service.
 
D) diseconomies of scope.

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The correct answer is A

If products or services can be produced in larger volume with a lower average cost than the same products or services produced in smaller volume, the production is said to exhibit economies of scale.

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2、A bank can service 1,000 loans for an average cost of $362 per year, per loan. If the bank can service 5,000 loans for an average cost of $298 per year, per loan, the servicing is said to have:

A) economies of scale.
 
B) economies of scope.
 
C) synergy of service.
 
D) diseconomies of scope.

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The correct answer is B

Studies of the relationship between the size of banks and their average cost indicate that the average cost curve has a relatively flat U-shape.

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3、Comprehensive Bank, with assets of $1 billion and costs of $100 million, purchases a firm with assets of $100 million and expenses of $20 million. The firm purchased provides financial services not yet provided by Comprehensive Bank. The costs of the bank after the purchase are $115 million for the combined assets. The merger most likely reflects:

A) diseconomies of scale.
 
B) diseconomies of scope. 
 
C) economies of scope. 
 
D) economies of scale.

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The correct answer is C

Economies of scope represent the synergy of jointly producing two products rather than producing each one independently.

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4、The average cost of producing Product A is $37. The average cost of producing Product B is $22. If Product A and Product B can be produced jointly for an average cost of $54, there are:

A) economies of scale.
 
B) economies of scope.
 
C) synergy of products.
 
D) diseconomies of scope.

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The correct answer is B

If products or services can be produced jointly for an average cost that is less than the sum of the averages costs for the products produced separately, the production is said to exhibit economies of scope.

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5、Research on economies of scale and scope suggest all of the following EXCEPT:

      I. There is strong evidence that “bigger is better.”
     II. There is relatively low payoff from technological innovation.
    III. Economies of scope and scale don’t explain cost differences among the same size firms.
    IV. Large financial institutions gain efficiency by reducing costs rather than by generating revenue.

A) I and IV.
 
B) I and II.
 
C) I and III.
 
D) II and III.

nayizhenfeng

The correct answer is A

There is no strong evidence that “bigger is better.” There is relatively low payoff from technological innovation. Economies of scope and scale don’t explain cost differences among the same size firms. Large financial institutions gain efficiency by generating revenue rather than by reducing costs.