Which of the Following Is an Example of Diseconomies of Scale

question 332

Multiple Choice

Which of the following is an example of diseconomies of scale?

• A) As the computer industry has expanded, demand for professionally trained computer programmers has also increased, which has caused the salaries of computer programmers to increase.
• B) As a firm hires additional workers, each worker adds less to total output than the previous worker.
• C) A firm increases in size and is therefore able to lower its health insurance costs because as the size of the group insured increases, the premium per person decreases substantially.
• D) As the demand for calculators decreased, the price of calculators actually rose.

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Definitions:

Actor-Observer Effect

A psychological phenomenon where people tend to attribute their own actions to external factors while attributing others' actions to internal characteristics.

Videotaped Conversation

A recorded interaction between individuals on video, used for analysis or study.

Equal Participation

The concept that all members of a group have the same opportunity and responsibility to contribute to a process or activity.

Self-Handicapping

A cognitive strategy by which people avoid effort in the hopes of keeping potential failure from hurting self-esteem.