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4 marksCosts of Production and Economies of Scale

CSEC Economics · May/June 2012 · Paper 2 · Question 5(a)

Section II contains four essay-style questions of which candidates must answer two.

Differentiate between 'fixed' and 'variable' costs. Give ONE example of EACH type of cost.

The mark scheme is shown once you've answered.

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Other parts of this question

  1. 5(b)List THREE types of business organization.[3 marks]
  2. 5(c)(i)Distinguish between 'economies of scale' and 'diseconomies of scale'.[4 marks]
  3. 5(c)(ii)Draw a well-labelled diagram showing the regions of economies of scale and diseconomies of scale.[4 marks]
  4. 5(d)Explain how a baker would respond to the THREE resource allocation decisions that arise in a free market economy.[5 marks]

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