Economics Multiple Choice Question – 27 September 2017

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

According to research, 57% of UK consumers would consider changing insurance providers in the next 12 months.

The underlying assumptions of rational decision making are that:

Select ONE answer:

  1. consumers aim to maximise utility and firms aim to minimise profits
  2. consumers aim to minimise utility and firms aim to maximise profits
  3. consumers aim to maximise utility and firms aim to maximise costs
  4. consumers aim to minimise utility and firms aim to minimise costs
  5. consumers aim to maximise utility and firms aim to maximise profits

Explain one possible reason why 43% of consumers in the UK would not consider changing insurance providers, even though they may be offered lower prices by other insurance providers:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

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

The answer is 5 – Typically we assume that when making decisions people aim to maximise their own welfare, and firms aim to maximise profits for its owners.

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