This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 4
Not correct – this would have increased sales of tickets due to more brand awareness and therefore possibly increased profits
Not correct – this would lead to more sales and therefore profits because of an increase in demand caused by a growing economy, and thus increase in incomes
Not correct – cheaper aviation fuel would have led to a decrease in costs and therefore an increase in profits.
Correct – Definition of profits e.g. total revenue – total costs. More competition from other airlines would result in agreater choice for customers & a downward pressure on prices. This could have decreased sales/revenue and therefore profits.
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 2
Not correct – a shift in the supply curve to the right would indicate an increase in the supply of food grains.
Correct – Definition of supply: the amount a producer is willing and able to supply at a given price in a given time period. Lack of rain meant that half the food grain crops had failed which meant less grain could be supplied. The supply curve will shift to the left because the amount of food grain available will be reduced no matter what price people are prepared to pay.
Not correct – movement along the supply curve would only occur if the demand curve shifts or a change in price causing a movement along the supply curve.
Not correct – the decrease in the price of food grains would only occur if there had been an increase in supply or a fall in demand
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 1
Correct – Definition of corporation tax: a tax on profits. If corporation tax is reduced from 20% on profits, companies will pay less in tax. This means companies will be able to increase the level of their retained profits that they keep.
Not correct – because paying less tax could lead to more retained profit and an increase in wages.
Not correct – fixed costs are not affected by increase or decreases in corporation tax.
Not correct – companies are more likely to hold or decrease their selling price if there are tax savings to be had.
This multiple-choice question is suitable for Accounting KS5 classes.
The answer is 2
Not correct – any marketing costs are a cost to the business and not the next best alternative for Alex.
Correct – Definition: opportunity cost is the cost of the next best alternative foregone. Alex had to choose between being self-employed or receiving an income from paid employment. The result is the sacrifice of a regular secure income for the potential of higher income he might generate from self- employment.
Not correct – paying taxes on profits is a legal requirement for businesses and not an alternative option. As an employee Alex paid income tax, which as a sole trader he will now have to pay on his profits so is not an opportunity cost.
Not correct – risking business failure is a characteristic of an entrepreneur not the opportunity forgone to run your own business. Risk of business failure only occurs after the business is up and running and is not an opportunity cost of starting a business.
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