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VapNat, an e-cigarette store, has experienced a steep decline in sales over the past six months, despite the economy in general performing well.

Which of the following are most likely to have contributed to such a decline?

Select ALL that apply.

A.

Social factors

B.

Tech nological factors

C.

Legal factors

D.

Environmental factors

E.

Political factors

F.

Economic factors

Which of the following is an example of fiscal policy?

A.

The central bank imposing controls on bank lending

B.

The removal of foreign exchange controls which restrict the transfer of currencies between countries

C.

The removal of regulations which restrict Sunday trading

D.

The creation of tax-exempt savings accounts to encourage savings

All of the following are arguments for privatizing a public sector industry except which one?

A.

The profit motive will make the industry more efficient

B.

The industry will respond more to consumer wishes and preferences

C.

The industry is a natural monopoly

D.

Competition will force the industry to become more efficient

In a market economy the market mechanism can achieve all the following except one. Which is the exception?

A.

Signaling changes in consumer tastes

B.

Causing supply to respond to changes in demand

C.

Eliminating excess supply and demand

D.

Ensuring a socially fair distribution of goods and services

In a market economy, prices act as all of the following except which one?

A.

Signals to consumers about costs

B.

Signals to producers about consumer preferences

C.

A substitute for barter

D.

A means of allocating scarce resources

A market is in equilibrium. If the government imposes a minimum price above the equilibrium price, there will be:

A.

an extension in demand, a contraction in supply and a market shortage

B.

a decrease in demand, an extension in supply and a market surplus

C.

a contraction in demand, an increase in supply and a market surplus

D.

a contraction in demand, an extension in supply and market surplus

If a manufacturing firm contributes to global warming as a byproduct of its production process, this is an example of

A.

A merit good

B.

An external social cost

C.

A diseconomy of scale

D.

A public good

Economies of scale can result from all the following except one. Which is the exception?

A.

An increase in the size of a firm's capacity and plant

B.

A bus company replacing smaller buses with larger buses

C.

A factory employing two shifts of workers rather than one shift per day

D.

Increased firm size allowing the firm to employ specialist managers

A rise in the demand for petrol by motorists is likely to follow a rise in the price of:

A.

Steel

B.

Second-hand cars

C.

Public transport

D.

Motor insurance

A business can always raise its profits or reduce its losses by increasing output

A.

providing total revenue rises as a result

B.

if it is operating on the downward sloping part of its average cost curve

C.

providing total revenue rises faster than total variable costs

D.

if it is operating on the upward sloping part of its total revenue curve