Last Attempt BA1 Questions

Fundamentals of Business Economics Questions and Answers

Question 37

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

Options:

Steel

Second-hand cars

Public transport

Motor insurance

Question 38

Porter describes differentiation as a firm having a unique product or service that is valued by the customer. Which ONE of the following is NOT a factor in the higher prices and profits from differentiated products?

Options:

Lower price elasticity of demand due to the product having few substitutes

Price inelastic supply because differentiation acts as a barrier to entry against other firms

Higher customer satisfaction making them willing to pay a higher price

Higher costs of production and marketing necessitating the charging of a higher price

Question 39

In a supply and demand diagram, other things remaining the same, an increase in production costs will normally shift:

Options:

The demand curve to the right

The supply curve to the right

The demand curve to the left

The supply curve to the left

Question 40

All of the following will tend to increase the number of firms in any one industry except which one?

Options:

Decreasing returns to scale

High transport costs

Low barriers to entry

Product differentiation

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Fundamentals of Business Economics Questions and Answers

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