Skip to content
Back to quiz
6. Normal profit is:
- the amount of profit made in the last accounting period
- the minimum amount of profit which is necessary to keep the firm in the industry
- the amount a firm would like to make
- the maximum amount of profit which the firm can make
- the expected amount of profit that the firm should make
7. Costs and benefits which are outside the market system are known as:
- externalities
- public goods
- merit goods
- indivisibilities
- imperfections
8. A firm will produce those goods which:
- increase turnover
- enable it to make the greatest return on capital
- can be produced quickly
- sell most
- people need
9. The long run may be defined as:
- none of the above
- the period in which all factors of production are variable
- a period when one factor of production is fixed
- a period when all factors of production are fixed
- any period longer than six months
10. In perfect competition firms:
- have power but no interest in affecting the market price
- can collude to affect the market price
- have power to affect the market price
- have no power to affect the market price
- cannot leave the market
11. If an industry is characterised by a few very large firms and barriers to entry, then it is likely to have
- none of the above
- economies of scale and decreasing costs
- normal profits
- constant costs
- perfect competition
12. In general, increased competition in an industry will tend to:
- reduce advertising
- increase profits
- reduce prices
- increase prices
- none of the above
13. Which of the following is true of pure monopoly?
- there are barriers to the entry of new firms
- there are no barriers to the entry of new firms
- none of the above
- only normal profits are possible
- there are many buyers and sellers
14. Characteristics of perfect competition include:
- No barriers to entry or exit
- Imperfect Knowledge
- Few small firms
- No profit maximisation
- Government intervention
15. In November 2017, the Bank of England Base Rate was increased to:
- 0.25%
- 1%
- 0.5%
- 1.25%
- 0.75%
16. Marginal cost may be defined as being the cost of producing:
- one more (or less) unit of a commodity
- the average number of units of a commodity
- one unit of a commodity
- the total number of units of a commodity
- any unit of a commodity
17. In the property market:
- the long run supply curves are more elastic than the short run supply curves
- the long run and the short run supply curves have the same elasticity
- no factors of production are variable in the short run
- all factors of production are variable in the short run
- the long run supply curves are less elastic than the short run supply curves
18. At the equilibrium price:
- the quantity demanded is less than the quantity supplied
- the quantity supplied will vary
- the quantity demanded is greater than the quantity supplied
- the quantity demanded is equal to the quantity supplied
- the price does not remain constant in the short run
19. If the elasticity of supply is 2.5, when the price of a commodity rises by 1%, sellers:
- increase supply by 2.5%
- increase supply by 1%
- do not change supply
- decrease supply by 2.5%
- decrease supply by 1%
20. Normally, firms aim to:
- satisfy their workers
- none of the above
- produce as cheaply as possible
- Maximise profits
- produce as much as possible