Month: June 2025

The marginal propensity to consume measures?

Select ONE answer:

1. The relationship between changes in consumption and changes in consumer utility
2. The proportion of household incomes spent on consumer goods
3. The proportion of total national income spent on consumer goods
4. The relationship between changes in income and changes in consumption

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct == > The relationship between changes in income and changes in consumption.

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Which of the following is a source of economies of scale?

Select ONE answer:

1. The introduction of a new product
2. Bulk buying
3. The employment of skills in production
4. Cost savings resulting from new production techniques

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
2. Correct == > Technical improvements could apply at any scale of operations, as well as the employment of skills and the introduction of a new product. The ability to obtain discounts because of the size of orders (bulk buying) is a direct result of larger scale operations.
3. Not correct
4. Not correct

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

Which of the following would be regarded by economists as a factor of production?

Select ONE answer:

1. Demand
2. Enterprise
3. Supply
4. Innovation

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
2. Correct == > Enterprise is one of the four factors of production, along with labour (including management), land and capital.
3. Not correct
4. Not correct

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

The basic economic problem facing all economies is?

Select ONE answer:

1. Maximising economic growth
2. Unemployment
3. Inflation
4. Allocating scarce resources

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 4

1. Not correct
2. Not correct
3. Not correct
4. Correct == > The basic economic problem is one of allocating scarce resources and economics is the study of how those scarce resources are or should be used.

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

Little Staffie Ltd produces chairs.

An economist working for the firm predicts that if average incomes rise next year, then demand for the firm’s chairs will increase in direct proportion to the rise in incomes (assuming all other factors remain unchanged).

The accuracy of the economist’s prediction depends on whether the chairs produced by Little Staffie Ltd?

Select ONE answer:

1. Are normal goods
2. Have many complementary goods
3. Have few complementary goods
4. Have few substitutes

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 1

1. Correct == > With normal goods, if incomes rise demand for the product will rise and this will be the case regardless of the existence of either substitutes or complements.
2. Not correct
3. Not correct
4. Not correct

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