Month: July 2017

Excess capacity means?

Select ONE answer:

1. Supply is less than demand
2. Demand exceeds sales
3. A firm is producing less than its competitors
4. A firm is producing less than it could
5. A firm can sell more than it can make

Explain why a firm might have excess capacity?
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 4 – Excess capacity is a situation in which actual production is less than what is achievable or optimal for a firm. This often means that the demand for the product is below what the business could potentially supply to the market.

 

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Price skimming is NOT likely if?

Select ONE answer:

1. The firm has a unique product
2. The firm has a patent for the product
3. Demand for the good is price elastic
4. Demand for the good is price inelastic
5. The firm has a heavily branded good

Explain your answer?
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 3 – “Theoretically” is the key word here, because although price skimming can effectively segment the market, it’s almost impossible for the strategy to capture all of the consumer surpluses.  Price skimming is most effective when the product follows an inelastic demand curve, meaning the quantity demanded doesn’t rise or fall drastically in response to a change in prices.

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Price discrimination is …?

Select ONE answer:

1. Charges the same price for the same goods
2. Sets a price by adding percentage to costs
3. Uses a high price to enter a market
4. Uses a low price to enter a market
5. Sets different prices for different customers for the same goods

Give a real-life example of price discrimination:
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 5 – price discrimination is the action of selling the same product at different prices to different buyers, in order to maximize sales and profits.

 

This work is licensed under a Creative Commons Attribution 4.0 International License.

For an economist, the key purpose of economic activity is to?

Select ONE answer:

1. To remove inequality
2. To satisfy needs and wants
3. Save scarce resources
4. Maximise profit
5. Help government planning

Explain what is the basic economic problem?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Economics KS5 classes.

The answer is 2 – To satisfy needs and wants

This work is licensed under a Creative Commons Attribution 4.0 International License.

For an economist, the key purpose of economic activity is to?

Select ONE answer:

1. To remove inequality
2. To satisfy needs and wants
3. Save scarce resources
4. Maximise profit
5. Help government planning

Explain what is the basic economic problem?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Economics KS5 classes.

The answer is 2 – To satisfy needs and wants

This work is licensed under a Creative Commons Attribution 4.0 International License.