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Quiz on Economics Unit 3 - Edexcel, created by anjalisingh02 on 12/02/2016.

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Economics Unit 3 - Edexcel

Question 1 of 21

1

A merger between 2 firms, within the same industry, operating at the same stage of production.
What type of merger is this?

Select one of the following:

  • Vertical

  • Horizontal

  • Conglomerate

  • Forward Vertical

  • Backward Vertical

Explanation

Question 2 of 21

1

A merger between 2 firms in entirely unrelated industries.
What type of merger is this?

Select one of the following:

  • Vertical

  • Horizontal

  • Conglomerate

  • Forward Vertical

  • Backward Vertical

Explanation

Question 3 of 21

1

A merger between 2 firms, within the same industry, operating at different stages of production.
What type of merger is this?

Select one of the following:

  • Vertical

  • Horizontal

  • Conglomerate

  • Forward Vertical

  • Backward Vertical

Explanation

Question 4 of 21

1

Why do firms remain small?

Select one or more of the following:

  • Gain expertise

  • Barriers to Entry/Exit

  • Niche-Market Businesses

  • Lack of resources

  • Lack of motivation

  • Benefit from greater profits

  • Increase sales

Explanation

Question 5 of 21

1

Why do firms grow?

Select one or more of the following:

  • Increase market share

  • Barriers to Entry/Exit

  • Gain power

  • Benefit from greater profits

  • Avoid attention from potential buyers

  • Lack of resources

Explanation

Question 6 of 21

1

Productive efficiency occurs...

Select one of the following:

  • at the lowest point of the average cost curve

  • when the cost of production and the demands of consumers are taken into account to maximise welfare

Explanation

Question 7 of 21

1

How can productive efficiency be shown on a diagram?

Select one of the following:

  • P=MC

  • MC=AC

Explanation

Question 8 of 21

1

Allocative efficiency occurs...

Select one of the following:

  • at the lowest point of the average cost curve

  • when the cost of production and the demands of consumers are taken into account to maximise welfare

Explanation

Question 9 of 21

1

How can allocative efficiency be shown on a diagram?

Select one of the following:

  • P=MC

  • MC=AC

Explanation

Question 10 of 21

1

Profit maximisation occurs where...

Select one of the following:

  • AC=AR

  • MC=MR

  • MR=0

  • AR=MR

Explanation

Question 11 of 21

1

Revenue maximisation occurs where...

Select one of the following:

  • AC=AR

  • MC=MR

  • MR=AR

  • MR=0

Explanation

Question 12 of 21

1

Sales maximisation occurs where...

Select one of the following:

  • MC=MR

  • MR=AR

  • AC=AR

  • MR=0

Explanation

Question 13 of 21

1

Which one best describes Perfect Competition?

Select one of the following:

  • High Barriers to Entry/Exit

  • Imperfect knowledge

  • Few large firms dominate

  • Homogenous products

Explanation

Question 14 of 21

1

Which one best describes Monopolistic Competition?

Select one of the following:

  • Low concentration ratio

  • Homogenous products

  • Perfect knowledge

  • No barriers to Entry/Exit

Explanation

Question 15 of 21

1

Which one best describes Oligopoly?

Select one of the following:

  • Many small firms

  • Perfect knowledge

  • High barriers to Entry/Exit

  • Unique products

Explanation

Question 16 of 21

1

Which one best describes Monopoly?

Select one of the following:

  • Low concentration ratio

  • Perfect Knowledge

  • Unique products

  • Low barriers to Entry/Exit

Explanation

Question 17 of 21

1

How do you calculate Average Fixed Costs?

Select one of the following:

  • Fixed Costs/Output

  • Variable Costs/Output

  • Fixed Costs/Price

  • Variable Costs/Price

Explanation

Question 18 of 21

1

How do you calculate Average Variable Costs?

Select one of the following:

  • Variable Costs/Output

  • Variable Costs/Price

  • Fixed Costs/Output

  • Fixed Costs/Price

Explanation

Question 19 of 21

1

How do you calculate Marginal Costs?

Select one of the following:

  • Change in Total Costs/ Change in Quantity

  • Change in Quantity/ Change in Total Costs

  • Change in Fixed Costs/ Change in Quantity

  • Change in Variable Costs/ Change in Quantity

Explanation

Question 20 of 21

1

How do you calculate Total Revenue?

Select one of the following:

  • Price x Quantity

  • Total Costs x Quantity

  • (Price x Quantity)/ Quantity

  • Total Revenue/ Quantity

Explanation

Question 21 of 21

1

How do you calculate Average Revenue?

Select one of the following:

  • (Price x Quantity)/ Quantity

  • Fixed Costs/ Quantity

  • Price x Quantity

  • Variable Costs x Quantity

Explanation

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