Month: August 2017

The price of a small chocolate bar increased from 50 pence to 55 pence per bar. The manufacturers found that the demand for their bar decreased by 5%. What is the price elasticity of demand (PED) for the chocolate bar?

Select ONE answer:

1. -1
2. -2
3. -0.5
4. -5
5. -10

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

The answer is 3 – Price elasticity measures the responsiveness of the quantity demanded or supplied of a good to a change in its price. It is computed as the percentage change in quantity demanded—or supplied—divided by the percentage change in price. i.e. -5% (decrease in quantity demanded) / (55/50 = 10% increase) = -0.5

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Which ONE of the following economic agents is most likely to desire profit maximisation within a firm?

Select ONE answer:

1. The managers
2. The customers
3. The local government
4. The owners
5. The press

Give 3 alternative ‘aims’ of firms?
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 4 – Usually, in economics, we assume firms are concerned with maximising profit. Higher profit means higher dividends for shareholders.

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Which ONE of the following best describes a ‘planned’ economy’?

Select ONE answer:

1. An economic system in which decisions about production and investment are decided by individuals and firms.
2. An economic system in which decisions about production and investment are decided by a central body or government.
3. An economic system in which is designed to ensure the fairest allocation of scarce resources.
4. An economic system in which decisions about production and investment are decided by a democratic vote of workers.
5. An economic system in which decisions about production and investment are decided by committees.

Give 3 examples of the disadvantages of a ‘planned economy’?
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 2 – an economy in which production, investment, prices, and incomes are determined centrally by the government.

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

Which ONE of the following is an advantage of ‘division of labour’?

Select ONE answer:

1. There will be an increase in allocative efficiency.
2. There will be an increase in motivation levels.
3. Through repetition, a worker becomes more effective at his/her job.
4. There will be an increase in the number of skills a worker will learn.
5. There is a decrease in costs

Give 3 examples of the disadvantages of ‘division of labour’?
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 3 – Practice makes perfect. By concentrating on the repeating the same task again and again, a worker acquires dexterity, skill and speed, and more­over, division of labour avoids waste of time and effort caused by changes from one task to another. Specialisation requires simplification of tasks and facilitates use of labour saving devices. Due to all these the quantity and quality of work increase tremendously.

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

Which ONE of the following best explains the difference between a ‘need’ and a ‘want’?

Select ONE answer:

1. A good is said to be ‘needed’ if it is necessary for survival whereas a good that is ‘wanted’ is not essential but is desired.
2. A good is said to be ‘needed’ if it is not essential but is desired whereas a good that is ‘wanted’ is necessary for survival.
3. A good is said to be ‘needed’ if its consumption is based upon rational desires whilst a good that is ‘wanted’ has a consumption based upon irrational desires.
4. A good is said to be ‘needed’ if it has to be provided by the Government whilst a good is said to be wanted’ if it is provided by the free market.
5. A good is said to be ‘needed’ if it has to be provided by the free market whilst a good is said to be ‘wanted if it is provided by the Government.

Give 3 examples of a positive economic statement?
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 1 – In economics, the idea of survival is real, meaning someone would die without their needs being met. This includes things like food, water, and shelter. A want, in economics, is one step up in the order from needs and is simply something that people desire to have, that they may, or may not, be able to obtain.

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