Economics Quiz

The price elasticity of demand for a product is -0.2. This means:

• Demand is price-elastic

• Revenue will increase if price increases

• The quantity demanded will increase by 2% if the price increases by 1%

• The quantity demanded will decrease by 20% if the price increases by 10%

The market research findings for a new product have a 95% confidence level. This means:

• 95% of customers who tried the product liked it

• 95% of new products will fail

• The findings are likely to be correct 95% of the time

• The product will succeed 95 times out of 100

The share price of a company is $2. The market capitalisation is $40 billion. The dividend paid by the company per share is $0.50. This means:

• The dividend yield is 2.5%

• The profit per share is $1.5

• There are 80 billion shares in the company

• The total dividends paid are $10 billion

Figure 1 shows an extract from a decision tree for launching a new product. Which of the following is the expected value of the new product launch?

• $5.2 million

• $6.8 million

• $8.0 million

• $12.0 million

Figure 2 contains marketing data showing a link between the incomes of consumers and the sales of Product Z. What type of correlation does Figure 2 show?

• Strong negative

• Strong positive

• Weak negative

• Weak positive

The price elasticity of demand for a product is -1.5. The price of the product is increased. Which of the following statements is true?

• Quantity sold will decrease and sales revenue will fall.

• Quantity sold will decrease and sales revenue will rise.

• Quantity sold will increase and sales revenue will fall.

• Quantity sold will increase and sales revenue will rise.

What will a business in the tertiary sector be most likely to focus on?

• Extracting raw materials from the ground

• Farming of crops such as wheat

• Manufacturing items such as textiles and food

• Selling a product to another business or the end consumer

Which of the following is most likely to be an objective of a marketing department?

• Improve liquidity through sale of assets

• Increase capacity utilisation

• Increase customer retention

• Reduce labour turnover

A business sells a product with a price elasticity of demand of –0.8 in 2023. Which of the following is true?

• Demand is perfectly elastic in 2023

• Demand is price elastic in 2023

• Demand is price inelastic in 2023

• Demand is unitary elastic in 2023

Which of the following is typically a characteristic of an entrepreneur?

• Cautious

• Inflexible

• Motivated

• Nervous