Month: July 2025

The Competition Act 1998 prohibits agreements, business practices and conduct that damage competition, including abuse of a dominant position.

Examples of specific types of conduct that are particularly likely to be considered as an abuse where the business is in a dominant position include which ONE of the following?

Select ONE answer:

1. Imposing transfer pricing
2. Providing public goods on behalf of the government
3. Applying different trading conditions to equivalent transactions, thereby placing certain parties at a competitive disadvantage
4. Starting a summer TV advertising campaign

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 3

1. Not correct
2. Not correct
3. Correct == > Imposing unfair purchase or selling prices would be considered as an abuse where the business is in a dominant position, but transfer pricing refers to the pricing of goods and services within a multi-divisional organisation, particularly regarding cross-border transactions.
4. Not correct

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

The Competition Act 1998 prohibits agreements, business practices, and conduct that damage competition, including abuse of a dominant position.

Examples of specific types of conduct that are particularly likely to be considered as an abuse where the business is in a dominant position include which ONE of the following?

Select ONE answer:

1. Imposing transfer pricing
2. Providing public goods on behalf of the government
3. Starting a summer TV advertising campaign
4. Limiting production markets or technical developments to the prejudice of consumers

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 == > Imposing unfair purchase or selling prices would be considered as an abuse where the business is in a dominant position, but transfer pricing refers to the pricing of goods and services within a multi-divisional organisation, particularly regarding cross-border transactions.

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

Anti-monopoly legislation is an example of government intervention to address market failure caused by?

Select ONE answer:

1. Market imperfection
2. Externality
3. Asymmetric information
4. Inequity

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 == > Monopoly is the antithesis of perfect competition and is, therefore, a market imperfection.
2. Not correct
3. Not correct
4. Not correct

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

The Staffie product is manufactured in the UK but is also imported into the UK from Belgium.

The UK government has recently decided to apply an import quota on imports of the product from Belgium at a level below the current level of imports.

This action will have the effect of?

Select ONE answer:

1. Only Belgium suppliers suffering a lower price
2. Both UK and Belgium suppliers suffering a lower price
3. Only UK suppliers enjoying a higher price
4. Both UK and Belgium suppliers enjoying a higher price

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 == > Restricting supply (via quota) will cause the price to rise.

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

Government intervention in a market economy can lead to an increase in economic welfare if?

Select ONE answer:

1. It sets a good’s maximum price above its equilibrium price
2. The market mechanism has failed to allow for externalities
3. It sets a good’s minimum price above its equilibrium price
4. The demand for inferior goods rises as incomes increase

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 == > Government intervention in a market economy can lead to an increase in economic welfare if the market mechanism has failed to allow for externalities. The government setting a minimum or maximum price above the equilibrium price would be ineffective. Demand for inferior goods falls as incomes rise.
3. Not correct
4. Not correct

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