5 Multiple Choice Questions

1. Which of the following factors relates to the internal business environment

A. New labour laws specifying maximum weekly working hours
B. A fall in the level of inflation
C. Agricultural damage to crops caused by global warming
D. A new political initiative to reduce production taxes for foreign companies
E. The management of human resources

2. An economic system in which the government and private sector interact to provide goods and services is known as

A. A developing economy
B. A mixed economy
C. The price mechanism
D. An unregulated economy
E. A command economy

3. Which of the following best explains why scarcity is a problem for all economies and societies

A. There are unlimited wants but limited resources to provide for them
B. Unemployed resources in the economy make goods too expensive
C. There is too much government interference in the economy
D. The cost of labour is high compared to capital
E. Trade barriers prevent the free flow of capital between nations

4. Which of the following features is most likely to be found in a command economy?

A. The government plans all production and distribution
B. Suppliers respond quickly to change in the pattern of demand
C. Consumers dictate what is produced through the market mechanism
D. Education is provided by the private sector
E. The government works together with the private sector to produce goods and supply services

5. Which of the following would NOT be counted as an economic factor affecting a firm?

A. A change in consumer tastes
B. The prices set by the firm’s competitors
C. The cost of raw materials
D. A requirement that the firm recognises trade unions
E. The rate of interest set by the Bank of England