Final answer:
The question revolves around the concept of yield in integrated circuit manufacturing, where a 1% defect rate implies a yield of 99%. This yield is crucial for cost efficiency, reflecting the importance of percent yield in manufacturing. The economies of scale in semiconductor production show that higher quantities result in lower average costs, which can be further optimized through international trade.
Step-by-step explanation:
The probability that an integrated circuit manufactured by the Ace Electronics Company will be defective is given as p=0.01, which indicates a defect rate of 1%. An integrated circuit is an electronic circuit consisting of transistors etched onto a piece of silicon, also known as a microchip. The yield of the manufacturing process is critical, as it represents the percentage of functional chips produced out of the total number of chips made. Higher yields mean higher efficiency and lower costs, essential for economic gains. The concept of percent yield is directly related to the cost efficiency in manufacturing processes. When producing semiconductors or any complex chemicals, a step with low percent yield can lead to significant waste and increased expenses.
In discussing economies of scale in the semiconductor industry, it is evident that as the quantity of semiconductors produced increases, the average cost of production typically decreases. This is due to factors like the spread of fixed costs over a larger output, specialized machines, and optimized production techniques. The curve depicting these costs generally slopes downward as quantity increases, illustrating the benefit of producing at higher volumes. When international trade is involved, even a smaller economy can take advantage of economies of scale by accessing larger markets, thus allowing for increased production and lower costs.