Business Studies Multiple Choice Question – 15 August 2021

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

Business Studies
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A few years ago, 50% of the food grain crop in an Indian state failed due to a lack of rainfall. 

Which ONE of the following would be the most likely impact of the food grain crop failure?

Select ONE answer:

  1. A shift in the supply curve of food grains to the right
  2. A shift in the supply curve of food grains to the left
  3. A movement along the supply curve for food grains
  4. A decrease in the price of food grains

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

  1. Not correct – a shift in the supply curve to the right would indicate an increase in the supply of food grains.
  2. Correct – Definition of supply: the amount a producer is willing and able to supply at a given price in a given time period. Lack of rain meant that half the food grain crops had failed which meant less grain could be supplied.  The supply curve will shift to the left because the amount of food grain available will be reduced no matter what price people are prepared to pay.
  3. Not correct –  movement along the supply curve would only occur if the demand curve shifts or a change in price causing a movement along the supply curve.
  4. Not correct – the decrease in the price of food grains would only occur if there had been an increase in supply or a fall in demand 

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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