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Which of the following will NOT affect the price elasticity of supply?

A.

The time period considered.

B.

Production costs.

C.

The level of stocks.

D.

Proportion of income spent.

Which of the following is correct in relation to businesses.

In order to maximise shareholder wealth, the primary objective of a business can be reflected in

(1) higher investment

(2) higher sales revenue

(3) higher share prices

(4) higher dividend payments.

A.

(1)and(3)

B.

(3) and (4)

C.

(1)and(2)

D.

(2) and (4)

ToyTown, a soft toy manufacturer, produces what it claims to be the cheapest teddy bears on the market. The graph shows the current price of a ToyTown teddy bear and its relationship to the demand for ToyTown teddy

bears.

If the price of ToyTown teddy bears were to increase, what would happen to the demand?

A.

Demand would fall as consumers would look for alternative teddy bears to buy

B.

Demand would increase because the teddy bears would be seen as more prestigious by consumers due to their higher prices

C.

Demand would fall as the relationship between price and demand as shown in the graph is inelastic

D.

Demand would increase as the relationship between price and demand as shown in the graph is elastic

Company X is a wholesaler. It sells the majority of its products in bulk to a small number of restaurants and cafes in the local area.

Which of the following will Company X experience in light of this?

Select ALL that apply.

A.

A reduction in distribution costs as a result of economies of scale

B.

A reduction in the number of staff needed to perform certain roles within the company

C.

The company will not be able to buy in bulk at a discount in the future

D.

The company will not be able to maximise efficiency due to rapid business growth

E.

It will not experience the benefits of economies of scale

The interest rate at TrowBank is currently running at 7%. The number of customers borrowing to invest has fallen drastically.

Which of the following explains why this is the case?

Select ALL that apply.

A.

The high interest rate means that it is more expensive to borrow to invest

B.

Many customers have decided to save rather than invest due to the high interest rate

C.

The high interest rate means customers are less confident about investing

D.

The high interest rate has caused prices to rise, meaning customers have not got enough disposable cash to make investments

E.

The high interest rate has resulted in customers' purchasing power decreasing

A regressive tax is defined as one where:

A.

The amount of tax paid by a taxpayer falls as income rises

B.

The rate of tax is different for different income levels

C.

The proportion of income paid in tax rises as income falls

D.

The tax is levied on expenditure not income

jerry has just been appointed the director of Foodgo Pic, an international supermarket chain. He outlines his main priorities to his staff, which are as follows:

1: To increase sales from £23bn per year to £30bn per year within the next five years.

2: To increase the number of items stocked in Foodgo stores to attract more customers.

3: To prioritise sales figures over profits, which have been stagnant for five years.

Which of the following best describes why shareholders may be unhappy with jerry's approach to the business?

A.

A focus on sales rather than profits would mean shareholder dividends may decrease

B.

An increase in the number of products in Foodgo stores will likely lead to increased footfall and hence increased sales and profits

C.

The increase of sales from £23bn a year to £30bn a year is not ambitious enough and needs to be revised

D.

An increase in sales will lead to a fall in the price of shares in Foodgo Pic, meaning shareholders will receive less in dividends

Quantitative easing, the purchase of government or private securities by the central banks from investors, is an example of

A.

contractionary monetary policy.

B.

contractionary fiscal policy.

C.

expansionary fiscal policy.

D.

expansionary monetary policy.

Governments provide public goods, such as street lighting, because

A.

private business providers would exploit consumers and make excess profits

B.

it would be an unprofitable activity for private business because of the free-rider problem

C.

governments are more efficient producers of such goods

D.

there are significant external costs in the production process

The government has set a maximum house price due to a massive house price rise in the last decade. This is denoted by the line Q1Q2 on the graph.

Which of the following may occur in light of the introduction of the maximum house price as it appears on the graph?

Select ALL that apply.

A.

There will be a shortage of housing supply in Lingford.

B.

A 'black market' may develop in housing, meaning the maximum price is ignored.

C.

There will be a surplus of housing supply in Lingford.

D.

Landowners will continue to build residential properties at the same rate as before the maximum price was implemented.

E.

It is not likely that the maximum house price will need some sort of reform in the near future.