Y10 Economics - C20 Firms

Which sector of the economy involves firms that extract raw materials?

• Tertiary

• Secondary

• Primary

• Public

What is the main aim of private sector firms?

• Support the government

• Earn profit for its owners

• Reduce costs

• Provide a service

Which of the following is an example of a tertiary sector firm?

• Agricultural farm

• Retail shop

• Mining company

• Construction firm

What is a disadvantage of small firms?

• Flexibility in decision making

• Higher risk of business failure

• Lower start-up costs

• Easier to manage

What type of growth involves a firm expanding using its own resources?

• Vertical growth

• Horizontal growth

• Internal growth

• External growth

What is a horizontal merger?

• Unrelated firms combine to form a new firm

• Firms at different production stages merge

• Firms in the same industry join together

• Firms in different industries join together

Which of the following is a cause of diseconomies of scale?

• Specialized management

• Bulk purchasing

• Increased market share

• Communication problems

What is an advantage of a vertical merger?

• Higher market share

• Control over quality of raw materials

• Reduced competition

• Increased job opportunities

Which of the following is NOT a type of economies of scale?

• Financial economies

• Environmental economies

• Managerial economies

• Technical economies

What is a key characteristic of public sector firms?

• Owned by the government

• Owned by private individuals

• Aim to earn profit

• Focus on competition