Only answer 1,2 and 3 Leroy is considering setting up a large IT business to produce website for companies in Jamaica.He has made a list of the advantages of setting up a large rather than a smaller business which heis going to present to a bank manager.Questions:Which of the following advantages should be classified as internal and external economies? Incach case, explain why.1. There has been growth in the number of people with IT qualifications in Jamaica.2. He would be able to borrow more cheaply than if he set up as a small business.3. Jamaica has been developing a reputation as a specialist provider of IT services.4. Leroy would be able to afford to invest in more sophisticated IT systems.5. He would be able to spread his risks by providing website to more IT businesses.

Economy of scale refers to factors that reduce production costs and increase the volume of output.…

Answered: 1,2 and

Business

Economics

1,2 and

Brief Principles of Macroeconomics (MindTap Course List)

8th Edition

ISBN:9781337091985

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter7: Production And Growth

Section: Chapter Questions

Problem 9PA

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Question

Only answer 1,2 and 3

Leroy is considering setting up a large IT business to produce website for companies in Jamaica.
He has made a list of the advantages of setting up a large rather than a smaller business which he
is going to present to a bank manager.
Questions:
Which of the following advantages should be classified as internal and external economies? In
cach case, explain why.
1. There has been growth in the number of people with IT qualifications in Jamaica.
2. He would be able to borrow more cheaply than if he set up as a small business.
3. Jamaica has been developing a reputation as a specialist provider of IT services.
4. Leroy would be able to afford to invest in more sophisticated IT systems.
5. He would be able to spread his risks by providing website to more IT businesses.

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