Edexcel Business A Level 1.2 The Market

Which of the following is most likely to cause a decrease in demand for a product?

• Increase in the price of a complementary good

• Decrease in the price of a substitute good

• Increase in consumer income

• Increase in advertising expenditure

An increase in consumer income is most likely to:

• Increase the demand for inferior goods

• Decrease the demand for normal goods

• Increase the demand for luxury goods

• Have no effect on demand

Which of the following factors is unlikely to influence demand for a product?

• Seasonal changes

• Advertising campaigns

• Costs of production

• Demographics

A sudden increase in the population of young people would likely increase the demand for:

• Retirement homes

• Baby food

• Smartphones

• Luxury cruises

What effect would a successful advertising campaign have on demand for a product?

• Demand would increase

• Demand would decrease

• Price would automatically rise

• Supply would decrease

Which of the following best describes an external shock that could impact demand?

• A change in consumer fashion

• A natural disaster affecting production

• A rise in production costs

• A change in consumer preferences

What is the likely impact on supply when there is an increase in the costs of production?

• Supply increases

• Supply decreases

• Supply remains the same

• Price decreases

The introduction of new technology in production usually leads to:

• Higher costs of production

• A decrease in supply

• An increase in supply

• A decrease in demand

A government subsidy to a business is most likely to:

• Decrease demand

• Increase supply

• Increase production costs

• Increase taxes

Indirect taxes, such as VAT, typically have what impact on supply?

• Increase supply

• Decrease supply

• No effect on supply

• Increase demand