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 – 21 April 2022

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

woman draw a light bulb in white board
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A business has the following cash flow information for one particular month:

  • Opening balance: £15 000
  • Cash inflow: £17 000
  • Cash outflow: £34 000

What is the closing balance at the end of this month?

Select ONE answer

  1. – £12 000
  2. – £2 000
  3. £9 000
  4. £16 000

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
  2. Correct
  3. Not correct
  4. Not correct

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Business Studies Multiple Choice Question – 20 April 2022

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

woman draw a light bulb in white board
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Electromac is a small business with 50 employees.

It has a flat organisational structure.

A flat organisational structure has?

Select ONE answer

  1. many managers
  2. quicker decision-making
  3. a narrow span of control
  4. a long chain of command

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 – Fewer managers in a flat structure due to having fewer layers in the structure.
  2. Correct – A flat organisational structure e.g. where there are few levels/layers in the hierarchy. A small number of levels/layers results in better communication between managers and workers at Electromac. Because of a small number of levels there are fewer managers therefore decisions can be made more quickly than with other structures.
  3. Not correct – A flat organisational structures tend to have a wide span of control due to managers having more employees under their direct authority.
  4. Not correct – A long chain of command would have more layers than a flat organisational structure such as Electromac.

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Business Studies Multiple Choice Question – 19 April 2022

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

woman draw a light bulb in white board
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In March 2022, the pound sterling (£) depreciated against the euro (€) and the US dollar ($).

The most likely impact of this depreciation on UK businesses would be?

Select ONE answer:

  1. export prices will increase
  2. export orders will increase
  3. import orders will increase
  4. import prices will decrease

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 – export prices will now be cheaper for foreign buyers
  2. Correct –Depreciation of a currency is a decrease in the value of a country’s currency relative to one or more foreign currencies. The pound has depreciated meaning that European and American buyers need to exchange less of their own currency to buy the same number of pounds. This means that UK exports are now cheaper in Europe and America so the demand for exports increases.
  3. Not correct – imports will now be more expensive to the UK businesses and therefore orders will decrease.
  4. Not correct – import prices will increase as more pounds have to be exchanged for the same amount of euros and dollars.

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Business Studies Multiple Choice Question – 15 April 2022

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

woman draw a light bulb in white board
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Electromac has launched the long awaited very powerful next generation games console called the Kenyo, which uses newly developed technology.

What is the most appropriate pricing strategy for the new Kenyo?

Select ONE answer:

  1. Predatory pricing
  2. Price skimming
  3. Cost-plus pricing
  4. Competitive pricing

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 – Electromac is introducing a new technology, not aiming to force rivals out by offering a price so low it will not recover costs such as research and development.
  2. Correct – Price skimming is a pricing strategy used by businesses to initially set a high price for a new product which will reduce over time. Hard-core games players will pay higher prices to have the next generation equipment as soon as it is available. This allows Electromac to maximise its revenues in the early stages of the new Kenyo launch and price skimming will allow Electromac to recoup R&D costs and still make profit.
  3. Not correct – using standard mark-up pricing will not take advantage of the introduction of new technologies and the long-awaited launch of a next generation Kenyo.
  4. Not correct – Electromac’s new technology means there are no immediate competitive substitutes so they don’t need to offer a competitive price yet.

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