External Influences: Test 2 - Question Bank

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External Influences: Test 2

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Q2. All of the following are examples of unfair competition, except (Select one answer) (a) restricting supply to retailers who agree to take a complete range of items. (b) a monopoly charging excessive prices because of lack of competition. (c) market sharing; where a group of firms agree to share a market and fix prices in their favour. (d) a firm taking out a patent for a drug it has invented.

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Q3. The dominant firm in a market is operating at near full capacity, and the other firms can do little to significantly increase their supply to the market. This will lead to all of the following, except (Select one answer) (a) rising prices as demand begins to outstrip supply. (b) high and rising profit margins. (c) increased levels of marketing, especially advertising. (d) new firms considering entering the market.

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Q4. A rise in interest rates, followed by a rise in the exchange rate, will result in all of the following effects, except (Select one answer) (a) The price of imported raw materials will rise. (b) The price of imported raw materials will fall. (c) The price of exported goods will rise.. (d) Domestic producers will find it harder to compete against imported goods.

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Q5. The business cycle is the regular pattern of upturns and relative downturns in output and demand within an economy. All of the following can cause this, except (Select one answer) (a) Government policies which effectively achieve steady, sustainable growth. (b) changes in business confidence, leading to more of less capital investment. (c) stockbuilding, followed by destocking. (d) Irregular buying of consumer durables such as cars and household appliances.

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