Economics Multiple Choice Question – 31 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?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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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Economics Multiple Choice Question – 30 July 2017

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?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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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Economics Multiple Choice Question – 29 July 2017

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:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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.

 

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Economics Multiple Choice Question – 28 July 2017

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

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Economics Multiple Choice Question – 27 July 2017

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

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Economics Multiple Choice Question – 26 July 2017

Which one of the following statements is true?

Select ONE answer:

  1. A normative statement can be proven to be true or false
  2. A positive statement never contains the words could or should
  3. A normative statement always includes words such as should and must
  4. A positive statement can be tested against facts
  5. A normative statement is always expressed in numerative terms.

Explain what is a normative statement:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 4 – A positive statement can be tested against facts

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Economics Multiple Choice Question – 25 July 2017

Deflation means?

Select ONE answer:

  1. The economy is declining
  2. The interest rate is falling
  3. The exchange rate is rising
  4. Prices are falling
  5. Unemployment is rising

Explain one reason why deflation might occur:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 4 – Deflation is reduction of the general level of prices in an economy.

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