WHSS Economics: Firms Unleashed

A tax on which of the following is usually progressive and is paid by a large number of tax payers? A company profits B goods and services C incomes D sales of shares

• A

• B

• C

• D

A firm is producing an output which enables it to make more than normal profit. What must be true at that output? A Average revenue must be greater than total revenue. B Average revenue must equal average cost. C Total revenue must be greater than total cost. D Variable cost must equal price.

• A

• B

• C

• D

General Motors, a large multi-national company based in the United States, sold some of its European car assembly plants to other car manufacturers during the world recession (economic downturn) in 2009. Which economic reason would have been most likely to influence this decision? A to benefit from horizontal integration of manufacturing B to diversify and expand its product range C to encourage vertical integration of sales and production D to reduce its excess capacity in car production

• A

• B

• C

• D

The table shows how a firm’s total cost rises with changes in output. What is the average fixed cost of producing 5000 units? A $4 B $5 C $6 D $10

• A

• B

• C

• D

Mr Jones runs a small shop selling household appliances. His total revenue has declined due to the opening of a large supermarket which sells a similar range of goods. How could Mr Jones compete with the supermarket? A develop financial economies of scale B engage in a price-cutting war C introduce a massive advertising campaign D provide personal after-sales service

• A

• B

• C

• D

In 2009, the Chinese Government tried to increase household spending. Which policy measure would have been most likely to achieve this objective? A an increase in both direct and indirect taxes B a reduction in subsidies given to manufacturers C a requirement for commercial banks to reduce their lending D a switch from public to private sector provision of health care and pensions

• A

• B

• C

• D

A government decides to sell the monopoly supply of gas to households to a private firm. How could the government protect the interests of households after selling a large company to the private sector? A by excluding all competition from foreign companies B by imposing a tax on excess profits C by introducing a quota system for imports of gas D by removing price controls on gas

• A

• B

• C

• D

In 2015, 70000 extra people lost their jobs but total employment rose by 75 000. What could explain this? A Some people may have emigrated. B Some people may have gone back to education. C Some people may have re-entered the labour force. D Some people may have retired early.

• A

• B

• C

• D

A firm has fixed costs of $200 for its daily output. The table shows its daily total variable costs. What can be concluded about the firm’s average total cost? A it falls continuously B it is highest at output 4 units C it is lowest at output 4 units D it rises continuously

• A

• B

• C

• D

Some agricultural co-operatives have changed from labour-intensive to capital-intensive methods of production. What might be a cause of this change? A Average productivity of agricultural workers has increased. B Farming equipment has become more efficient. C People are eating less food for health reasons. D Some agricultural land has been sold for housing.

• A

• B

• C

• D