WHALES Commerce Challenge: Economics

Countries that have changed from command to market economies will expect to find an increase in:

• Choice

• Price Control

• Rationing

• Subsidies

A trade union is negotiating a wage rise for its members. What will increase the chance of the wage rise being granted?

• The company’s product has many substitutes.

• The economy is entering a period of recession.

• The government has made strike action illegal.

• Wages are a small part of the company’s costs.

The demand for and supply of a good both change. As a result the price of the good rises but the quantity traded remains the same. What must have happened to demand and supply?

• Demand: Fallen, Supply: Fallen

• Demand: Fallen, Supply: Risen

• Demand: Risen, Supply: Fallen

• Demand: Risen, Supply: Risen

A firm changes the price of its product and finds that its revenue increases. What combination of price change and price elasticity of demand would have caused this?

• Price falls; PED is between 0 and 1

• Price falls; PED is equal to 1

• Price rises; PED is between 0 and 1

• Price rises; PED is greater than 1

An athlete needs an income and also needs time for training and competitions. Which occupation is most appropriate for the athlete?

• department store manager who is paid a salary

• livestock farmer working for profit

• assembly-line worker who is paid a wage

• self-employed photographer

The table shows percentage increases in earnings in a country between 1997 and 2004. According to the table what happened between 1997 and 2004?

• All female workers became better paid than male workers.

• The highest paid male workers had the most rapid growth in earnings.

• The earnings of male workers became more evenly distributed.

• The earnings of female workers became less evenly distributed.

What is most likely to increase a firm’s profits?

• government controls on its prices

• grants for the purchase of new machines

• an increase in the wages paid to its workers

• rising costs of its raw materials

Which is a diseconomy of scale?

• Bulk buying reduces costs.

• Communications deteriorate.

• Employees are more motivated.

• Technological improvements take place

The governments of many countries raise revenue from a tax on a wide range of essential goods and services. What is the nature of this tax?

• It is direct and proportional.

• It is direct and regressive.

• It is indirect and proportional.

• It is indirect and regressive.

A person receives annual interest of 4% on their saving. Inflation is 5% per annum. What is the change in the real value of their saving?

• It falls 1%

• It rises 4%

• It falls 5%

• It rises 9%