Common Exam Topic

Earlier today I looked with one of my classes at an area from the higher level syllabus that makes a regular appearance on the short answer paper.

It is vital that students have a sound understanding of the difference between the law of diminishing returns (short run) and economies of scale (long run). The LDR helps students understand the shape of cost curves in the short run, vital if students are going to achieve a level 7.

We looked back over past short answer papers to see the variations of questions that have appeared on the topic. I then gave them 20mins to answer a given question (remember it is three short answer questions from a choice of 6 in an hour) before swapping answers for a marking exercise.

The questions that we found included:

1. Explain the difference between ‘dis-economies of scale’ in the long run and ‘diminishing returns’ in the short run. [10]

2.What are the distinctions between decreasing returns to scale and diminishing marginal returns. [10]

3.Using appropriate diagrams, explain the difference between the law of diminishing returns and economies of sclae [10]

I will produce an outline answer for one of these questions and post on the blog in next 24 hours.