Business studies - IGCSE

Use the following statements to answer this question:

I. Markets that have only a few sellers cannot be highly competitive.

II. Markets with many sellers are always perfectly competitive.

• I and II are true.

• I is true and II is false.

• II is true and I is false.

• I and II are false.

Which of the following costs may provide barriers to entry in a market?

• A) High research and development expenditures

• B) License fees

• C) Sunk costs associated with specialized facilities

• D) A and C

• E) A, B and C

If a new product is of high quality, it is likely to have...

• a high price

• a low price

• a price similar to that of competitors' products

• no price - it will be given away in a BOGOF promotion

Which of the following is NOT a reason for a business to adopt a new pricing strategy?

• it is trying to enter a new market

• it wants to make sure all its costs are covered

• it wants to decrease its profits

• it is trying to increase its market share

If the product is branded, it will likely be aimed at a particular market segment.

• True

• False

A shoe manufacturer produces 30,000 pairs of shoes at a total cost of $75,000. What is the cost of producing one pair of shoes?

• $0.40

• $4.00

• $0.25

• $2.50

An ice cream manufacturer produces vanilla ice cream at a cost of $0.90 per litre. Assuming the manufacturer uses a markup of 200%, what is the the selling price per litre?

• $18.00

• $1.80

• $270

• $2.70

The constant rise in the general level of prices over a period of time is termed ...

• expansion

• inflation

• unemployment

• consumption

When a person who is actively searching for employment is unable to find work, this is...

• expansion

• inflation

• unemployment

• consumption

A significant decline in general economic activity in a designated region is called

• expansion

• economic growth

• recession

• gross domestic product