Economics Multiple Choice Question – 12 August 2017

Which ONE of the following best explains the difference between a ‘need’ and a ‘want’?

Select ONE answer:

  1. A good is said to be ‘needed’ if it is necessary for survival whereas a good that is ‘wanted’ is not essential but is desired.
  2. A good is said to be ‘needed’ if it is not essential but is desired whereas a good that is ‘wanted’ is necessary for survival.
  3. A good is said to be ‘needed’ if its consumption is based upon rational desires whilst a good that is ‘wanted’ has a consumption based upon irrational desires.
  4. A good is said to be ‘needed’ if it has to be provided by the Government whilst a good is said to be wanted’ if it is provided by the free market.
  5. A good is said to be ‘needed’ if it has to be provided by the free market whilst a good is said to be ‘wanted if it is provided by the Government.

Give 3 examples of a positive economic statement?
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 1 – In economics, the idea of survival is real, meaning someone would die without their needs being met. This includes things like food, water, and shelter. A want, in economics, is one step up in the order from needs and is simply something that people desire to have, that they may, or may not, be able to obtain.

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Economics Multiple Choice Question – 11 August 2017

Which ONE of these is a normative economic statement?

Select ONE answer:

  1. An increase in the price of cocoa beans will lead to an increase in the price of coffee.
  2. Cars that consume more than the average amount of petrol per mile should have greater taxation.
  3. Subsidies given to a merit good will lead to a reduction in price to the consumer.
  4. The availability of gold as a natural resource is limited.
  5. School children must do 5 hours of homework per week to be successful.

Give 3 examples of a normative economic statement?
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 2 – In economics and philosophy, a normative statement expresses a value judgment about whether a situation is desirable or undesirable. It looks at the world as it “should” be.

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Economics Multiple Choice Question – 31 July 2017

Excess capacity means?

Select ONE answer:

  1. Supply is less than demand
  2. Demand exceeds sales
  3. A firm is producing less than its competitors
  4. A firm is producing less than it could
  5. A firm can sell more than it can make

Explain why a firm might have excess capacity?
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 4 – Excess capacity is a situation in which actual production is less than what is achievable or optimal for a firm. This often means that the demand for the product is below what the business could potentially supply to the market.

 

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Economics Multiple Choice Question – 30 July 2017

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

The answer is 3 – “Theoretically” is the key word here, because although price skimming can effectively segment the market, it’s almost impossible for the strategy to capture all of the consumer surpluses.  Price skimming is most effective when the product follows an inelastic demand curve, meaning the quantity demanded doesn’t rise or fall drastically in response to a change in prices.

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Economics Multiple Choice Question – 29 July 2017

Price discrimination is …?

Select ONE answer:

  1. Charges the same price for the same goods
  2. Sets a price by adding percentage to costs
  3. Uses a high price to enter a market
  4. Uses a low price to enter a market
  5. Sets different prices for different customers for the same goods

Give a real-life example of price discrimination:
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This is multiple choice question is suitable for Economics KS5 classes.

The answer is 5 – price discrimination is the action of selling the same product at different prices to different buyers, in order to maximize sales and profits.

 

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