Business Studies Multiple Choice Question – 26 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 produces audio products. The company was founded by music producer and singer Little Al.

The price elasticity of demand for Electromac Headphones is most likely to be low if the headphones.

Select ONE answer

  1. require a high proportion of a customer’s income
  2. have a unique and fashionable design
  3. are very similar to competitors’ headphones
  4. have low brand loyalty

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 – requiring a high proportion of income is likely to result in a high PED rather than a low PED as customers will be more price sensitive.
  2. Correct – % change in quantity demanded/ % change in price. If Electromac headphones have a unique and fashionable design customers will want to buy them regardless of price. This makes them less price sensitive thus leading to a low PED.
  3. Not correct – PED would be high rather than low as customers could easily switch to other headphone manufacturers on the market.
  4. Not correct – this would mean that customers are more willing to try other headphone brands over Electromac and it would have high.

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Business Studies Multiple Choice Question – 25 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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In Electromac’s third year of trading it experienced cash flow problems despite making a high profit.

To improve its cash flow position Electromac should?

Select ONE answer:

  1. give longer credit terms to customers
  2. pay its suppliers immediately
  3. use a factoring service
  4. increase its inventory levels

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 – payments will be delayed which will reduce the amount of cash flowing into the business and worsen the cash flow position.
  2. Not correct – this will result in more cash leaving the business before it needs to which will put more pressure on cash flow.
  3. Correct – Cash flow is the movement of money in and out of a business. Electromac needs cash immediately to meet its day to day operations. Factoring will give immediate payment and therefore should ease cash-flow.
  4. Not correct – more cash will be tied up in inventory which will worsen the cash flow situation.

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Business Studies Multiple Choice Question – 24 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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Increasing incomes in the UK economy result in a greater demand for clothing at all price levels.

Clothing is therefore best described as?

Select ONE answer:

  1. a normal good
  2. an inferior good
  3. a substitute good
  4. a complementary good

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 – A normal good has a positive income elasticity of demand. As incomes rise consumers have more disposable income. Consumers are likely to choose to spend the increased.
  2. Not correct – inferior goods would see a decrease in demand as consumers switch to more normal goods/it has a negative YED.
  3. Not correct – clothing is not being used as an alternative to another product.
  4. Not correct – clothing is not directly linked to any other product and clothing can be purchased independently from other goods.

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Business Studies Multiple Choice Question – 23 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 manufactures a wide range of fitness accessories.

In 2021 it launched its latest product, The LittleKen.

This has been described as being a question mark/problem child.

In the Boston Matrix a question mark/problem child is?

Select ONE answer:

  1. generates all of Fitbit’s profits
  2. has a high market share
  3. has potential for growth
  4. should no longer be produced

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 – The LittleKen is only one of ElectroMac’s wide range of fitness accessories which will also generate profits.
  2. Not correct – A question marks/problem child do not have a high market share unlike cash cows and stars.
  3. Correct – A question mark/problem child e.g. are new products with a low share of a high growth market. The LittleKen is a new fitness product and has just been launched in to the market. It may or may not be able to survive/compete in the market.
  4. Not correct – The LittleKen is a new product and has a potential for high growth unlike dogs.

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Business Studies Multiple Choice Question – 22 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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The following is an inventory control chart for a Staffordshire bakery selling fancy birthday cakes.

What is the reorder quantity of fancy birthday cakes?

Select ONE answer:

  1. 5
  2. 10
  3. 15
  4. 25

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 – Maximum inventory level – Minimum inventory level. 30 – 5 = 25 fancy birthday cakes

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