Tag: A-Level

Economics Multiple Choice Question – 3 November 2017

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

Which one of the following is a distinctive feature of a pure public good?

Select ONE answer:

  1. It is free to consumers
  2. It is produced by the state
  3. It is produced at zero cost
  4. Greater consumption by one person implies less by another
  5. Nobody can be excluded from consuming it

Give 3 examples of a pure public good and explain your reasonings?

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

The answer is 5 – Some MCQs involve knowing the definition of an important economic term. Here it’s the term ‘public good’. 2 is a believable answer in that the state provides goods for members of the public, but you have to know that this is not the meaning of the term. 3 has to be wrong, as the production of any good involves the use of scarce resources and cannot, therefore, be produced at zero cost. 4 is also plausible and wrong, as it is the exact opposite of a public good but It is true of a private good (if you consume an apple then I cannot consume it). Now consider 5 – This is one of the key features of a public good i.e. if street lighting is provided, for example, one cannot prevent people from consuming it.

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Economics Multiple Choice Question – 2 November 2017

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

The workers in a factory currently earn £240 for a 40 hour week. The management offers them a choice between either a straight 10% wage increase or an increase in the weekly wage to £260 along with a reduction in hours from 40 to 39 hours.

Disregarding the value of leisure time, what is the opportunity cost to each worker of opting for the 39 hour week?

Select ONE answer:

  1. £4.00
  2. £6.00
  3. £20.00
  4. £24.00
  5. £30.00

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

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

The answer is 1 – Opportunity Cost is a key concept in economics and its principle applies to many areas of economic activity. Here it’s applied to wages. As in this question, you will often need to make simple calculations so a calculator might be handy.  Option one is an increase of 10% of 240 pounds = 24 pounds. To get this what does the worker have to give up, that is, the opportunity cost? The pay increase if the extra leisure hour is taken is 260-240 pounds = 20 pounds per week. So the lost income through opting for the extra leisure hour is 4 pounds, the opportunity cost. Checking the other options you can see that both 3 and 4 are plausible but wrong answers because both figured in our calculations. To be good at MCQs you have to think with precision!

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Business Studies Multiple Choice Question – 22 October 2017

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

Mass marketing is likely to involve?

Select ONE answer:

  1. Job production
  2. Flow production
  3. Low fixed costs
  4. Large market size
  5. Limited distribution

Give a real life example of mass marketing:
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This is multiple choice question is suitable for Business Studies KS5 classes.

The answer is 4 – Mass marketing is a market strategy in which a firm decides to ignore market segment differences and appeal to the whole market with one offer. This supports the idea of broadcasting a message that will reach the largest number of people possible. Traditionally mass marketing has focused on radio, television and newspapers as the media used to reach this broad audience. By reaching the largest audience possible, exposure to the product is maximized, and in theory this would directly correlate with a larger number of sales or buys into the product.

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Business Studies Multiple Choice Question – 21 October 2017

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

A cash cow product in the Boston Matrix?

Select ONE answer:

  1. Has low sales in a slow-growth market
  2. Has low sales in a high-growth market
  3. Has high sales in a slow-growth market
  4. Has high sales in a high-growth market
  5. Has no sales

Give a real-life example of a cash cow product and explain why it is one:
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This is multiple choice question is suitable for Business Studies KS5 classes.

The answer is 3 – Cash cows are low-growth products with a high market share. These are mature, successful products with relatively little need for investment. They need to be managed for continued profit – so that they continue to generate the strong cash flows that the company needs for its Stars.

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Business Studies Multiple Choice Question – 20 October 2017

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

Price skimming is NOT likely if?

Select ONE answer:

  1. The firm has a unique product
  2. The firm has a patent for the product
  3. Demand for the good is price elastic
  4. Demand for the good is price inelastic
  5. The firm has a heavily branded good

Explain your answer using diagrams:
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This is multiple choice question is suitable for Business Studies KS5 classes.

The answer is 3 – Price skimming is a pricing strategy in which a business sets a relatively high initial price for a product or service at first, then lowers the price over time. It is effective only when the firm is facing an inelastic demand curve. If the long run demand schedule is elastic, market equilibrium will be achieved by quantity changes rather than price changes. Penetration pricing is a more suitable strategy in this case.

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