Question

describe how a study group of economics students could experience economies of scale as they study for an economics exam

Answer 1

Economies of scale are the cost advantage from business expansion. As some firms grow in size their unit costs begin to fall because of:

• Purchasing economies. It occurs when businesses often receive a discount because they are buying in bulk.
• Marketing economies. It occurs from spreading the fixed cost of promotion over a larger level of output.
• Administrative economies . It results from spreading the fixed cost of management staff and IT systems over a larger level of output.
• Research and development economies . It results from spreading the fixed costs of developing new or improved products over a larger level of output.

Economies of Scale during group study.

Economies of Increased Knowledge

When a group of students study together for Economics test they will have wide variety of notes, resources and books with each student having different books, helper guides and other relevant material. In this way they can have more knowledge as they can study and solve more questions and thus their knowledge will be increased.

Economies of Time

When many students study together they can divide the topics among themselves. Example One student may study demand and supply and other one may study markets and so on. All of them can explain the topic of study to other students. In this way time is saved. Otherwise a single student would have gone through all topics and this would have required more time and effort.

Cost Economies.

A group of students will bring different study material like guides, class notes, helper books etc. A single student would have purchased all this stuff and spend too much money if he was studying alone. But when group of students study together the cost and expenses of books and study material is divided and money is saved.

However it has certain disadvantages also like wasting time due to gossiping, making noise and instead of studying watching movies, going out for fun or even sleeping. This may result in negative consequences like failing in test and affecting their career in long term.