Types Of Business Activities: Quiz!
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- 1.
The primary stage of production is concerned with:
- A.
Growing crops and extracting the earth’s natural resources
- B.
Providing services to consumers and industry
- C.
converting natural resources into finished goods
- D.
transporting goods to the final consumer.
Correct Answer
A. Growing crops and extracting the earth’s natural resourcesExplanation
The primary stage of production is concerned with growing crops and extracting the earth's natural resources. This stage involves activities such as farming, mining, fishing, and forestry, where raw materials are obtained from the environment. These natural resources are then used as inputs in the production process to create goods and services.Rate this question:
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- 2.
The tertiary sector of the industry tends to be the most important sector in high income (most developed) countries because:
- A.
Agricultural output is more important than services
- B.
As consumers have little money to spend they use most of their income to buy manufactured goods
- C.
Most workers are employed in manufacturing products in these countries
- D.
As consumers, incomes are high they spend more on services such as hotels and leisure.
Correct Answer
D. As consumers, incomes are high they spend more on services such as hotels and leisure.Explanation
In high-income countries, the tertiary sector of the industry tends to be the most important sector because consumers have high incomes and therefore spend more on services such as hotels and leisure. This is supported by the fact that agricultural output is not as important as services in these countries, and consumers prioritize spending on manufactured goods. Additionally, the statement acknowledges that most workers are employed in manufacturing products, indicating that the manufacturing sector is not the most important in high-income countries.Rate this question:
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- 3.
A free-market economy is one in which:
- A.
All resources are owned by the state (government)
- B.
There are only secondary industries
- C.
all resources are privately owned
- D.
Some resources are owned by the state and some are privately owned.
Correct Answer
C. all resources are privately ownedExplanation
In a free-market economy, all resources are privately owned. This means that individuals and businesses have the right to own and control their own property, including land, capital, and natural resources. The government does not have ownership or control over these resources. This allows for competition and individual choice in the market, as individuals and businesses are free to produce, buy, and sell goods and services based on their own preferences and self-interest.Rate this question:
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- 4.
Which of the following is a claimed advantage of a free market economy?
- A.
Government control makes sure that all incomes are equal.
- B.
As there is no competition, money will not be wasted on advertising
- C.
Everyone will always have work if they want it.
- D.
Businesses are free to compete with each other and prices will be kept low.
Correct Answer
D. Businesses are free to compete with each other and prices will be kept low.Explanation
In a free market economy, businesses are allowed to compete with each other without government interference. This competition leads to lower prices as businesses strive to attract customers by offering better products or services at lower prices. This advantage of a free market economy promotes efficiency and innovation, as businesses are incentivized to constantly improve and provide value to consumers. It also allows consumers to have more choices and the ability to make informed decisions based on price and quality. Overall, this aspect of a free market economy promotes economic growth and benefits both businesses and consumers.Rate this question:
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- 5.
In a mixed economy, which of the following groups of industries are most likely to be controlled/owned by the government?
- A.
Hotels and restaurants
- B.
Health and public transport
- C.
Building and taxi services
- D.
food shops and farming
Correct Answer
B. Health and public transportExplanation
In a mixed economy, the government is more likely to control/own industries that are essential for the well-being and functioning of society. Health and public transport are considered vital services that directly impact the public's welfare. Therefore, it is reasonable to assume that the government would have control or ownership over these industries to ensure their accessibility and quality for all citizens.Rate this question:
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- 6.
Which of the following is the best definition of privatization?
- A.
When private limited companies convert into public limited companies
- B.
When a partnership converts into a private limited company
- C.
When a state owned industry is sold into the private sector
- D.
When a private sector business is purchased by the government
Correct Answer
C. When a state owned industry is sold into the private sectorExplanation
Privatization refers to the process of transferring ownership and control of a state-owned industry or enterprise to the private sector. This involves the sale of the industry or enterprise to private individuals or companies, who then assume responsibility for its management and operations. This allows for increased competition, efficiency, and innovation in the industry, as private sector entities are driven by profit motives and market forces.Rate this question:
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- 7.
Which one of the following is a claimed disadvantage of privatization?
- A.
Jobs might be lost as the private owners will try to cut costs and increase profits.
- B.
The government will raise large sums of money which could help to reduce taxes.
- C.
There will be less competition than when the industry was a nationalised monopoly.
- D.
Politicians will now influence business decisions.
Correct Answer
A. Jobs might be lost as the private owners will try to cut costs and increase profits.Explanation
One claimed disadvantage of privatization is that jobs might be lost as private owners often try to cut costs and increase profits. When industries are privatized, the new owners may implement cost-cutting measures, such as reducing the workforce, in order to maximize their profits. This can result in job losses and unemployment.Rate this question:
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- 8.
Which of the following is NOT a recognized way of measuring the size of a bus?
- A.
Number of employees
- B.
Value of sales
- C.
Value of capital employed
- D.
Number of computers used
Correct Answer
D. Number of computers usedExplanation
The number of computers used is not a recognized way of measuring the size of a bus. The size of a bus is typically measured by factors such as the number of employees, the value of sales, and the value of capital employed. The number of computers used may be an indicator of technological infrastructure, but it does not directly measure the size of a bus.Rate this question:
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- 9.
Using capital employed as a measure, which appears to be the largest firm?
- A.
A
- B.
B
- C.
C
- D.
D
Correct Answer
B. BExplanation
Based on the information provided, the largest firm can be determined by comparing their capital employed. Since the question states that "Using capital employed as a measure," it implies that the firm with the highest capital employed would be the largest. Therefore, firm b is the largest based on this measure.Rate this question:
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- 10.
Using the number of employees as a measure, which appears to be the largest firm?
- A.
A
- B.
B
- C.
C
- D.
D
Correct Answer
A. AExplanation
Based on the information provided, the firm with the largest number of employees would be firm a.Rate this question:
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- 11.
Using the value of sales turnover as a measure, which appears to be the largest firm?
- A.
A
- B.
B
- C.
C
- D.
D
Correct Answer
C. CExplanation
Based on the given information, the largest firm appears to be firm c. This is because the question states that sales turnover is being used as a measure, and without any additional information or context, it can be assumed that the firm with the highest sales turnover would be the largest.Rate this question:
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- 12.
Which of the following is the most likely reason for owners wishing to expand their businesses?
- A.
To keep control of the business
- B.
To make higher profits
- C.
To encourage competition
- D.
To avoid publicity
Correct Answer
B. To make higher profitsExplanation
Owners wishing to expand their businesses are most likely motivated by the desire to make higher profits. Expanding a business typically involves increasing its market share, reaching more customers, and generating more revenue. This can lead to higher profits through economies of scale, increased sales, and improved efficiency. By expanding, owners can tap into new markets, diversify their products or services, and potentially increase their profit margins. Therefore, the most likely reason for owners wishing to expand their businesses is to make higher profits.Rate this question:
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- 13.
Which of the following is an example of horizontal integration between two businesses?
- A.
An oil company and an insurance company merge.
- B.
A shoe shop buys out the factory making shoes.
- C.
A steel firm takes over a coal mine that supplies coal.
- D.
Coca-Cola takes over a small soft drink business.
Correct Answer
D. Coca-Cola takes over a small soft drink business.Explanation
Horizontal integration refers to the acquisition or merger of companies that operate in the same industry or provide similar products or services. In this case, Coca-Cola taking over a small soft drink business is an example of horizontal integration because both companies operate in the same industry and provide similar products (soft drinks). This allows Coca-Cola to expand its market share, increase its product offerings, and potentially eliminate competition in the soft drink industry.Rate this question:
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- 14.
One of the reasons for vertical integration between two businesses could be to:
- A.
Diversify into a completely different industry
- B.
Reduce competitors supplying the same product
- C.
Control the supply of raw materials needed for production
- D.
Obtain higher market share
Correct Answer
C. Control the supply of raw materials needed for productionExplanation
Vertical integration refers to the merging of two or more companies that operate at different stages of the production process. In this case, the correct answer is to control the supply of raw materials needed for production. By integrating vertically, a company can ensure a stable and consistent supply of raw materials, reducing the risk of shortages or price fluctuations. This allows the company to have more control over its production process and potentially lower costs. Additionally, vertical integration can also lead to increased efficiency and coordination within the supply chain.Rate this question:
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- 15.
In some industries, there are many successful small firms. One of the reasons for this could be that:
- A.
The consumers demand specialist products or services
- B.
There are great opportunities for economies of scale
- C.
The industry is owned by the state
- D.
the market is very large.
Correct Answer
A. The consumers demand specialist products or servicesExplanation
The reason why there are many successful small firms in some industries could be because consumers demand specialist products or services. This means that there is a niche market for unique and specialized offerings, allowing smaller firms to cater to these specific needs and thrive.Rate this question:
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Current Version
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Apr 27, 2023Quiz Edited by
ProProfs Editorial Team -
Apr 18, 2010Quiz Created by
Sachou10
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