Economics Multiple Choice Question – 13 December 2017

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

Demand for a product is more likely to be price elastic if?

Select ONE answer:

  1. It is heavily branded
  2. There are few substitutes
  3. It is patented
  4. There are many similar products
  5. It is heavily differentiated

Explain with a real-life example what is meant by a price-elastic product:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Economics KS5 classes.

The answer is 4 – A number of factors come into play in determining whether demand is price elastic or price inelastic in a given market. Factors affecting price elasticity of demand include the number of close substitutes; the cost of switching between products; the degree of necessity or whether the good is a luxury; the proportion of a consumer’s income allocated to spending on the good; the time period allowed following a price change – demand is more price elastic, the longer that consumers have to respond to a price change; whether the good is subject to habitual consumption; peak and off-peak demand; and the breadth of definition of a good or service. With many similar products, there is no protection for the product against being switched to another competing product.

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Economics Multiple Choice Question – 12 December 2017

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

If the Income Elasticity of Demand is +2 and income rises by 10%, what will happen to sales?

Select ONE answer:

  1. Rise by 5%
  2. Decrease by 5%
  3. Rise by 20%
  4. Fall by 20%
  5. Stay the same

Explain with a real-life example what is meant by an income-elastic product:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Economics KS5 classes.

The answer is 3 – The formula for calculating income elasticity of demand is the percent change in quantity demanded divided by the percent change in income. So if income goes up by 10% and YED is 2 then the % Change in QD will be 10% * 2 = 20%

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Business Studies Multiple Choice Question – 11 December 2017

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

Tyler is a small independent shoe store. It is located on a local high street. A new hypermarket that sells shoes as part of its product offering has just been built at the bottom of the high street. Tyler has seen its sales fall in recent months and the owner is looking at ways he can compete more effectively.

Which ONE of the following is MOST LIKELY to help reduce Tyler’s costs in an effort to compete more effectively?

Select ONE answer:

  1. Increase its advertising in the local newspaper
  2. Provide better service by taking on more staff
  3. Increase the range of its shoes
  4. Ordering cheaper shoes from its suppliers
  5. Relocating to new premises

What are the other things that Tyler could do become more competitive through cost reduction?
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This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 4 – Cheaper shoes will allow Tyler to reduce the price he charges and allow him to be more competitive as a result against his larger rival.

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Business Studies Multiple Choice Question – 10 December 2017

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

Valerie owns a dairy farm in Cornwall. In 2007 she decided to use some of the milk they produce to make their own brand of ice cream. After analysing the local competition they developed a brand called Truro’s best. It is very rich and creamy and is sold at a premium price. Most of their customers are in the catering industry – hotels and restaurants. Valerie has now an established product range and can also produce ice cream in any flavour to order.

Which ONE of the following suggests that there was an opportunity in the local market for Valerie’s ice cream to enter?

Select ONE answer:

  1. Unemployment in the region was rising
  2. Ice cream is made from milk
  3. There was only one supplier of premium-priced ice-cream in the area
  4. The pound is getting stronger against the Euro
  5. Large ice-cream manufacturers can supply ice-cream to order

What are other things would you consider to be important in determining whether there is an opportunity for Valerie in the premium ice-cream market?
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 3 – if there is only one other supplier then there is an opportunity for Valerie to enter the local market as she can supply an established product range and flavours to order.

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Business Studies Multiple Choice Question – 9 December 2017

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

A business makes bottled and canned soft drinks? Which ONE of the following in itself is MOST LIKELY to make it more competitive against its rivals?

Select ONE answer:

  1. The employment of two extra workers
  2. An increase in profit compared to last year
  3. The launch of a new range of drinks at a lower price point at the same quality.
  4. A rise in the price of its drinks range
  5. New regulation on the use of sugar in soft drinks

What are other things would you consider to be important in making the business more competitive in the bottled and canned soft drinks market.
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Business Studies KS4 classes.

The answer is 3 – a new drinks range at a lower price point will make it more competitive as rivals struggled to compete and consumers value cheaper price and same quality.

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