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Chapter 2 Multiple choice questions
Return to The Business Environment 4e Student Resources
Chapter 2 Multiple choice questions
*
not completed
.
Which of the following is
not
part of the opportunity cost of a university education for a full-time student?
Any tuition fees payable
correct
incorrect
Cost of food
correct
incorrect
Income forgone from not working full time
correct
incorrect
Cost of textbooks
correct
incorrect
*
not completed
.
Which of the following perspectives tends to put more faith in the free operation of markets as a way of bringing about economic efficiency?
The neoclassical view
correct
incorrect
The interventionist or structuralist view
correct
incorrect
The radical or Marxist view
correct
incorrect
The green or environmentalist view
correct
incorrect
*
not completed
.
Which of the following statements best describes what economists mean by the term 'scarcity'?
When unlimited needs and wants exist and yet resources are limited.
correct
incorrect
When limited needs and wants exist and yet resources are unlimited.
correct
incorrect
When people cannot afford to buy what they need to guarantee a minimum standard of living.
correct
incorrect
When as a result of high demand prices of resources and commodities rise.
correct
incorrect
*
not completed
.
Which one of the following statements relating to scarcity is most likely to be associated with a socialist/Marxist perspective?
We will never satisfy our needs and wants because they are infinite and resources are finite.
correct
incorrect
Given that resources are scarce the aim of the economic environment is to ensure that we minimize the amount of resources used in production whilst ensuring high-quality outputs.
correct
incorrect
Even if we accept that at the global level there is scarcity, the real pressing problem is that inequality means that resources are used to satisfy the needs of the rich at the expense of the poor. We thus have a world where there is abundance for the few and poverty for many.
correct
incorrect
We need to live within the resource constraints of the planet.
correct
incorrect
*
not completed
.
If the demand for a good is relatively price inelastic and its price rises the revenue will:
Fall
correct
incorrect
Remain constant
correct
incorrect
Rise
correct
incorrect
Depends on how supply responds
correct
incorrect
*
not completed
.
If a 10 per cent rise in price causes a 5 per cent fall in the quantity demanded:
The price elasticity of demand is -5
correct
incorrect
The price elasticity of demand is -2
correct
incorrect
The price elasticity of demand is -0.5
correct
incorrect
The price elasticity of demand is -0.2
correct
incorrect
*
not completed
.
Which of the following options is
not
an example of 'market failure'?
Failure of a firm to maximize its profits
correct
incorrect
Failure to produce merit goods
correct
incorrect
Failure to produce public goods
correct
incorrect
Failure to account for externalities
correct
incorrect
*
not completed
.
Which of the following is an example of a primary form of business activity?
Hairdressing
correct
incorrect
Automobile production
correct
incorrect
Banking
correct
incorrect
Forestry
correct
incorrect
*
not completed
.
Which of the following statements is most likely to be true?
As incomes rise the demand for agricultural goods in general will fall.
correct
incorrect
As incomes rise the percentage of total income spent on agricultural goods in general tends to fall.
correct
incorrect
As incomes rise the percentage of total income spent on agricultural goods in general tends to rise.
correct
incorrect
As incomes rise total spending on agricultural products in general will fall.
correct
incorrect
*
not completed
.
A business is more likely to be able to exercise monopoly power if it operates in a market in which the demand is:
Relatively price elastic
correct
incorrect
Income elastic
correct
incorrect
Unitary elastic in terms of price
correct
incorrect
Highly price inelastic
correct
incorrect
*
not completed
.
Which of the following statements best describes what economists mean by a merit good?
Goods which people deserve if they are work hard
correct
incorrect
Goods that it is felt people should own or have access to irrespective of ability to pay
correct
incorrect
Goods which rich people buy to demonstrate how rich they are
correct
incorrect
Goods which are impossible to be provided to one person without excluding other people from benefitting from its provision
correct
incorrect
*
not completed
.
If as a result of a fall in price the revenue of a business was to increase, then we can conclude that the market in which the business operates is:
Small
correct
incorrect
Uncompetitive
correct
incorrect
Price inelastic in relation to demand
correct
incorrect
Price elastic in relation to demand
correct
incorrect
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