Category: Business Studies

Business Studies Multiple Choice Question – 15 April 2022

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

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Electromac has launched the long awaited very powerful next generation games console called the Kenyo, which uses newly developed technology.

What is the most appropriate pricing strategy for the new Kenyo?

Select ONE answer:

  1. Predatory pricing
  2. Price skimming
  3. Cost-plus pricing
  4. Competitive pricing

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

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

This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 2

  1. Not correct – Electromac is introducing a new technology, not aiming to force rivals out by offering a price so low it will not recover costs such as research and development.
  2. Correct – Price skimming is a pricing strategy used by businesses to initially set a high price for a new product which will reduce over time. Hard-core games players will pay higher prices to have the next generation equipment as soon as it is available. This allows Electromac to maximise its revenues in the early stages of the new Kenyo launch and price skimming will allow Electromac to recoup R&D costs and still make profit.
  3. Not correct – using standard mark-up pricing will not take advantage of the introduction of new technologies and the long-awaited launch of a next generation Kenyo.
  4. Not correct – Electromac’s new technology means there are no immediate competitive substitutes so they don’t need to offer a competitive price yet.

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Business Studies Multiple Choice Question – 14 April 2022

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

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UK fashion T-shirt manufacturer Stafford Fashions Ltd needs a new machine costing £125 000 to cut fabric for its T-shirt production lines.

Which one of the following would be the MOST appropriate source of finance?

Select ONE answer:

  1. Trade credit
  2. Overdraft
  3. Leasing
  4. Debenture

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 – trade credit is normally designed for purchase of raw materials such as fabrics from suppliers rather than large items of capital equipment, such as a new machine.
  2. Not correct – overdrafts are usually given to help cash flow problems in the short term not for long term purchases of assets.
  3. Correct – leasing, allows a company to rent/without owning an asset. Leasing is the most suitable for SF Ltd because they will have the use of the cutting machine immediately. Therefore SF Ltd will not have to find, borrow or pay out the full £125k before starting to earn revenue and potentially profits from its operation.
  4. Not correct – debentures offer longer term finance usually to develop much larger capital projects, which is not what is required to purchase a piece of equipment costing £125 000.

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Business Studies Multiple Choice Question – 31 January 2022

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

woman draw a light bulb in white board
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The Big Adventure Company offers a range of niche holidays, such as walking Cannock Chase and climbing Pudding Hill.

Which one of the following would be the most appropriate marketing strategy for The Big Adventure Company to use?

Select ONE answer:

  1. Penetration pricing
  2. Specialist magazines
  3. Special offers
  4. National television

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

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

This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 2

  1. Not correct – because penetration pricing would not be needed as there is less competition and demand is likely to be price inelastic.
  2. Correct – A niche market is a small part of the overall market that has certain special characteristics or marketing strategies e.g. the combination of the 4Ps used to promote the product to the target market to achieve their goals. The Big Adventure Company only offers a small range of holidays and is not targeting the mass holiday market so focuses on specific types of holidays. Specialist magazines will be read by the target market and therefore provide the most effective means of communication.
  3. Not correct – because special offers are unlikely to be used as the product is more important than the price.
  4. Not correct – because the cost would be prohibitive for a small company and is more suitable for a mass market.

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Business Studies Multiple Choice Question – 30 January 2022

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

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In May December 2021, The New Little Fawn announced it would recruit 30 new members of staff.

This will widen the span of control of its existing managers.

What would be one benefit to The New Little Fawn of a wider span of control?

Select ONE answer:

  1. It can provide more management positions
  2. Managers will have more time to supervise each employee
  3. The organisational structure will remain the same
  4. It will be easier to control a greater number of employees

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 – because there will be fewer management positions as no additional managers are being employed.
  2. Not correct – because an increased span of control means managers have less time with each employee.
  3. Correct – Definition of span of control e.g. the number of employees under a manager’s direct control or definition of organisational structure e.g. the number of layers in the business or definition of wider span of control e.g. managers will have more employees to control/supervise. Although more employees have been recruited there has been no change to the number of layers within the organisational structure. This will increase output without increasing layers/overheads
  4. Not correct – because it will be more difficult to control the increased number of employees because the number of managers has not increased.

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Business Studies Multiple Choice Question – 29 January 2022

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

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Staffordshire fashion designer, Bob Smith, produces ONE-OFF designs of clothing for fashion shows, films, celebrities and Rock stars.

Which aspect of the design mix would be the most important for his ONE-OFF designs?

Select ONE answer:

  1. Efficiency
  2. Aesthetics
  3. Economic manufacture
  4. Function

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

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

This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 2

  1. Not correct – because Bob is making one-off clothing so will not be concerned over how quickly he produces each piece of clothing.
  2. Correct – Design Mix refers to the proportions in which the function, aesthetics and economic manufacture are combined in the overall design. As a designer, Bob will be more concerned with how the clothing looks (i.e. the aesthetic aspect of the design mix). Often catwalk designs sell because of what they look like rather than the function or price of the clothing.
  3. Not correct – because economic manufacture is concerned with how cheaply a product can be made for and designer clothes have high price tags and one-off consumers are not mainly concerned with low prices.
  4. Not correct – because designer clothes are not made for everyday wear (i.e. functional).

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