Month: July 2025

Big Brum plc has been charged under the Competition Act 1998 with entering into an illegal anti-competitive agreement with one of its closest competitors, called Nasty Notts plc.

The company will be charged with breaching?

Select ONE answer:

1. Chapter 1 of the Competition Act 1998
2. Chapter 2 of the Competition Act 1998
3. Chapter 3 of the Competition Act 1998
4. Chapter 4 of the Competition Act 1998

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 == > Chapter 1 of the Competition Act 1998 specifically deals with anti-competitive agreements.
2. Not correct
3. Not correct
4. Not correct

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

The government is considering placing an additional tax on cigarettes to raise revenue to finance healthcare benefits.

The demand for cigarettes is price inelastic.

Which of the following statements is true?

Select ONE answer:

1. The tax on cigarettes may not raise as much revenue as anticipated in the years to come because the demand for cigarettes is likely to become more elastic over time
2. This tax will not raise much revenue either in the short term or the long term since demand is price inelastic
3. No tax revenue can be raised in this way because sellers of cigarettes will just lower their price by the amount of the tax and, therefore, the price of cigarettes to consumers will not change
4. This is a very good way to raise revenue, both in the short term and in the long term, because there are no substitutes for cigarettes

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 == > The tax on cigarettes may not raise as much revenue as anticipated in the years to come because the demand for cigarettes is likely to become more elastic over time. Price elasticity nearly always increases over time and will reduce the tax revenue. People can change their behaviour given enough time.
2. Not correct
3. Not correct
4. Not correct

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

Big Brum plc is a multinational company.

It has recently been charged with being in breach of the Competition Act 1998 in respect of collusive behaviour in its UK operations.

If found guilty, the company could, amongst other sanctions, face a fine of?

Select ONE answer:

1. Up to 10% of annual worldwide revenues
2. Up to 10% of annual UK revenues
3. Up to 20% of annual worldwide revenues
4. Up to 20% of annual UK revenues

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 == > Collusion can lead to a fine of up to 10% of annual worldwide revenues.
2. Not correct
3. Not correct
4. Not correct

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

The government recently passed regulations affecting the way in which car hire companies must address certain health and safety issues within their business.

Big Staffie plc is a major player in the UK car hire business.

In anticipation of these new regulations the company put in place procedures and technology which exceed these new government regulations.

From this Big Staffie plc’s response to the new regulations has been one of?

Select ONE answer:

1. Innovation
2. Entrenchment
3. Mere compliance
4. Full compliance

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 == > Innovation in this context is where regulation serves to trigger the discovery and introduction of new procedures and technologies – the ‘innovation effect, as a basis for competitive advantage in an industry.
2. Not correct
3. Not correct
4. Not correct

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

Intervention by the government to impose a limit on businesses’ carbon emissions is an example of regulation motivated by the wish to address market failure caused by?

Select ONE answer:

1. Asymmetric information
2. Equity
3. Market imperfection
4. Externalities

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 == > An externality is an adverse social consequence which the private producer has no incentive to minimise.

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