Firms — Paper 1 · IGCSE Economics 0455

6 Shares in the Japanese part of the American fast-food giant McDonald's hit an all-time low in August 2002. Sales at McDonald's 3800 restaurants in Japan fell dramatically despite the assurance that the company used only imported beef, which was free from a disease affecting Japanese cows. From the above statement what is true about McDonald's? A It is a multi-national because it has 3800 restaurants. B It is a multi-national because it imports raw materials. C It is a public company because it issues shares on the stock exchange. D It is a public company because it operates in America and Japan.

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2004

7 ‘International companies have made substantial investments in computer production in India. India is now a major centre of the world computer industry. Profit margins are high since labour costs are a tenth of those in the USA.’ What does this suggest is the reason for companies locating in India rather than in the USA? A access to cheap land B availability of capital investment C availability of investment funds D competitive wage rates

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2004

5 Which source of finance cannot be used by a private company? A a bank loan B a bank overdraft C an issue of shares on the Stock Exchange D retained profits

1 marks

Answer: C

This question in 0455/11 May/June 2006

5 The following report appeared in a newspaper. ‘The Chinese government is to allow the cigarette producer, BAT, to set up new factories in China.’ What type of organisation is BAT likely to be? A a multi-national company B a partnership C a private company D a public corporation

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2006

20 What is the most likely reason for a company to employ more workers? A increased demand for its product B increased taxes on the product C investment in labour-saving machinery D wage rises in the company

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2006

7 What is the main advantage that a public limited company has over a private limited company? A It operates in the public sector. B Its shares can be sold on the stock exchange. C It is managed by a director. D Its shareholders have limited liability.

1 marks

Answer: B

This question in 0455/11 May/June 2007

8 What is the function of a stock exchange? A It enables shareholders to sell their shares. B It fixes fair prices for shares. C It promises to buy unsold shares. D It sets the number of shares.

1 marks

Answer: A

This question in 0455/11 May/June 2007

9 A French company employs French people, is located only in France, sells shares on the stock exchange but uses other firms to transport its products to other countries. What type of company is this? A a co-operative B a private company C a public company D a multi-national

1 marks

Answer: C

This question in 0455/11 May/June 2007

19 Which service is most likely to be supplied by a small business? A banking B dental treatment C heart surgery D rail travel

1 marks

Answer: B

This question in 0455/11 May/June 2007

8 Which type of business organisation has its shares quoted on a stock exchange? A private company B public company C co-operative D public corporation

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2007

9 A company is described as a multinational if it A employs workers of several nationalities. B exports goods to several countries. C has production units in several countries. D has shareholders from several countries.

1 marks

Answer: C

This question in 0455/11 May/June 2008

14 What is a firm’s aim when it advertises its product? A to shift its demand curve to the left B to shift its supply curve to the left C to shift its demand curve to the right D to shift its supply curve to the right

1 marks

Answer: C

This question in 0455/11 May/June 2008

8 What is a characteristic of a public company? A It is owned and controlled by its members. B It is owned and controlled by its partners. C It is owned and controlled by its shareholders. D It is owned and controlled by the government.

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2008

13 Many people prefer to buy clothes from a local shop rather than travel to a specialist tailor to have them made. Which combination of characteristics of the local shop would make this most likely? A easily accessible shop high quality product more expensive B easily accessible shop average quality product less expensive C shop owner known to customer average quality product more expensive D shop owner known to customer poor quality product less expensive

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2008

19 25 % of both rural and urban consumers were reported to prefer products from Japan when buying electronic goods. Which combination of characteristics are the Japanese electronic goods likely to have which persuade consumers to make this choice? technology length of guarantee running costs A latest 12 months high B standard 12 months low C latest 24 months low D standard 24 months high

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2008

13 Three doctors decide to work together in one health centre. What form of business organisation are they most likely to choose? A a partnership B a private company C a public company D a public corporation

1 marks

Answer: A

This question in 0455/11 May/June 2009

13 What distinguishes a multi-national company from other companies? A It has agents in other countries. B It produces in other countries. C It takes part in international trade. D It uses raw materials and components from more than one country.

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2009

14 In August 2008, Infosys, an Indian information technology company, bought Axon, a UK information technology company. Which type of integration is this? A conglomerate B horizontal C vertical backwards D vertical forwards

1 marks

Answer: B

This question in 0455/11 May/June 2010

15 In August 2008, Infosys, an Indian information technology company, bought Axon, a UK information technology company. Which type of integration is this? A conglomerate B horizontal C vertical backwards D vertical forwards

1 marks

Answer: B

This question in 0455/12 May/June 2010

14 A milk processing company takes over a group of dairy farms before merging with a chain of supermarkets. Which types of integration have taken place? A diversification followed by horizontal B horizontal followed by vertical backward C vertical backward followed by vertical forward D vertical forward followed by diversification

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2010

15 What is usually an advantage of a small firm? A the ability to benefit from bulk buying arrangements B the ability to raise finance from a stock exchange C the ability to respond quickly to changes in consumer demand D the ability to run a national advertising campaign

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2010

16 In 2008, XL, the UK’s third largest tour operator went out of business. What would have been the effect of this on the level of competition in the industry, the external economies of scale experienced by the remaining firms and the level of business confidence in the UK? external economies UK business level of competition of scale confidence A increase increase reduce B increase reduce increase C reduce increase increase D reduce reduce reduce

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2010

16 What is usually an advantage of a small firm? A the ability to benefit from bulk buying arrangements B the ability to raise finance from a stock exchange C the ability to respond quickly to changes in consumer demand D the ability to run a national advertising campaign

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2010

14 In 2008, the world’s largest metal mining company, BHP, increased its profits by 20 %. What could have helped that happen? A a decrease in economic growth in the UK and the US B an increase in demand from China C more competition from other companies D more difficult mining conditions

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2010

16 A milk processing company takes over a group of dairy farms before merging with a chain of supermarkets. Which types of integration have taken place? A diversification followed by horizontal B horizontal followed by vertical backward C vertical backward followed by vertical forward D vertical forward followed by diversification

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2010

17 What is usually an advantage of a small firm? A the ability to benefit from bulk buying arrangements B the ability to raise finance from a stock exchange C the ability to respond quickly to changes in consumer demand D the ability to run a national advertising campaign

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2010

19 Cathay Pacific, Hong Kong’s largest airline, flies to a number of countries. Shares in the firm are owned by both individuals and other firms in a number of countries. The shares are traded on the Hong Kong Stock Exchange. Which type of business organisation is Cathay Pacific? A a partnership B a private limited company C a public corporation D a public limited company

1 marks

Answer: D

This question in 0455/11 May/June 2011

18 Cathay Pacific, Hong Kong’s largest airline, flies to a number of countries. Shares in the firm are owned by both individuals and other firms in a number of countries. The shares are traded on the Hong Kong Stock Exchange. Which type of business organisation is Cathay Pacific? A a partnership B a private limited company C a public corporation D a public limited company

1 marks

Answer: D

This question in 0455/12 May/June 2011

10 A person wishes to buy shares in order to make a long-term profit, but wants as little risk of short-term loss as possible. Which type of share is most likely to meet these wishes? A a share in a coffee growing company B a share in a fashion house C a share in a high-tech electronics company D a share in a supermarket chain

1 marks

Answer: D

This question in 0455/13 May/June 2011

18 Cathay Pacific, Hong Kong’s largest airline, flies to a number of countries. Shares in the firm are owned by both individuals and other firms in a number of countries. The shares are traded on the Hong Kong Stock Exchange. Which type of business organisation is Cathay Pacific? A a partnership B a private limited company C a public corporation D a public limited company

1 marks

Answer: D

This question in 0455/13 May/June 2011

16 General Motors, a large multi-national company based in the United States, sold some of its European car assembly plants to other car manufacturers during the world recession (economic downturn) in 2009. Which economic reason would have been most likely to influence this decision? A to benefit from horizontal integration of manufacturing B to diversify and expand its product range C to encourage vertical integration of sales and production D to reduce its excess capacity in car production

1 marks

Answer: D

This question in 0455/11 Oct/Nov 2011

19 Which type of business organisation has its shares quoted on a stock exchange? A co-operative B private company C public company D public corporation

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2011

12 Share prices on the stock market are most likely to rise if A employment falls. B interest rates fall. C interest rates rise. D tax rates rise.

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2011

15 Which type of business organisation has its shares quoted on a stock exchange? A co-operative B private company C public company D public corporation

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2011

17 General Motors, a large multi-national company based in the United States, sold some of its European car assembly plants to other car manufacturers during the world recession (economic downturn) in 2009. Which economic reason would have been most likely to influence this decision? A to benefit from horizontal integration of manufacturing B to diversify and expand its product range C to encourage vertical integration of sales and production D to reduce its excess capacity in car production

1 marks

Answer: D

This question in 0455/12 Oct/Nov 2011

16 Which type of business organisation has its shares quoted on a stock exchange? A co-operative B private company C public company D public corporation

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2011

18 General Motors, a large multi-national company based in the United States, sold some of its European car assembly plants to other car manufacturers during the world recession (economic downturn) in 2009. Which economic reason would have been most likely to influence this decision? A to benefit from horizontal integration of manufacturing B to diversify and expand its product range C to encourage vertical integration of sales and production D to reduce its excess capacity in car production

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2011

11 A trade union negotiates a basic weekly wage for its members with all employers in an industry. In addition to the basic wage, one company also operates a production bonus at factory level. What is the aim of this company? A to give equal wages to all workers B to increase the efficiency of the workers C to introduce a minimum wage D to reduce its total wage bill

1 marks

Answer: B

This question in 0455/11 May/June 2012

17 Amit and Pardeep set up in business together. Each has half of the shares in the business and limited liability. What type of business organisation is this? A a co-operative B a partnership C a private company D a public company

1 marks

Answer: C

This question in 0455/11 May/June 2012

11 What might be an advantage to a trade union when arguing for an increase in its members’ pay? A an increase in imports of a similar product B the development of a new and profitable brand of the company’s product C the development of new machines requiring fewer workers D the establishment of a local college providing training

1 marks

Answer: B

This question in 0455/12 May/June 2012

17 Which of these statements made by an Economics student about different types of business organisation is true? A Partnerships face problems in raising large sums of finance. B Private companies cannot have limited liability. C Public companies operate in the public sector of the economy. D Public corporations operate in the private sector of the economy.

1 marks

Answer: A

This question in 0455/12 May/June 2012

17 Which of these statements made by an Economics student about different types of business organisation is true? A Partnerships face problems in raising large sums of finance. B Private companies cannot have limited liability. C Public companies operate in the public sector of the economy. D Public corporations operate in the private sector of the economy.

1 marks

Answer: A

This question in 0455/13 May/June 2012

8 Partnerships in the United States of America (US) can now issue tradable shares and can limit the amount of money that shareholders may lose. To which type of business organisation do these changes make US partnerships similar? A co-operatives B public corporations C public limited companies D sole traders

1 marks

Answer: C

This question in 0455/11 Oct/Nov 2012

17 Partnerships in the United States of America (US) can now issue tradable shares and can limit the amount of money that shareholders may lose. To which type of business organisation do these changes make US partnerships similar? A co-operatives B public corporations C public limited companies D sole traders

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2012

10 What work is in the primary sector? A delivering milk B designing gardens C growing fruit trees D selling agricultural fertiliser

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2012

17 A group of hotels, owned and operated in France, needs its staff to be able to speak a number of languages so it employs people from different countries. Different firms, providing tours from other countries, send customers to the hotels in France. The hotel group has shares issued on the stock exchange. What type of company is the hotel group? A a multi-national B a partnership C a private company D a public company

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2012

3 Which group linked to a firm always bears the risk of the decision to produce? A creditors B managers C owners D workers

1 marks

Answer: C

This question in 0455/11 May/June 2013

17 In August 2008, Infosys, an Indian information technology company, bought Axon, a UK information technology company. Which type of integration is this? A conglomerate B horizontal C vertical backwards D vertical forwards

1 marks

Answer: B

This question in 0455/11 May/June 2013

18 The multinational Indian Tata Group, which has companies in chemicals, consumer goods, engineering and communications, has been buying foreign companies. What does this action most likely suggest about the company? A It intends to achieve a domestic monopoly position. B It intends to increase its level of specialisation. C It intends to reduce fixed costs. D It intends to spread risks by diversification.

1 marks

Answer: D

This question in 0455/11 May/June 2013

17 In August 2008, Infosys, an Indian information technology company, bought Axon, a UK information technology company. Which type of integration is this? A conglomerate B horizontal C vertical backwards D vertical forwards

1 marks

Answer: B

This question in 0455/12 May/June 2013

3 In August 2008, Infosys, an Indian information technology company, bought Axon, a UK information technology company. Which type of integration is this? A conglomerate B horizontal C vertical backwards D vertical forwards

1 marks

Answer: B

This question in 0455/13 May/June 2013

4 The multinational Indian Tata Group, which has companies in chemicals, consumer goods, engineering and communications, has been buying foreign companies. What does this action most likely suggest about the company? A It intends to achieve a domestic monopoly position. B It intends to increase its level of specialisation. C It intends to reduce fixed costs. D It intends to spread risks by diversification.

1 marks

Answer: D

This question in 0455/13 May/June 2013

3 To achieve horizontal integration a record company producing compact discs (CDs) could merge with another firm. What would this firm most likely be doing? A owning shops selling CDs B producing CDs C producing CD players D producing machinery used in the making of CDs

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2013

20 When will a trade union find it easier to achieve higher wages for its members? A when consumers demand more of the product made B when the company has a decrease in profits C when the cost of raw materials increases D when unemployment increases

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2013

17 39 of the 42 largest Chinese firms are described as state-owned enterprises. What form of organisation will these enterprises have? A co-operative B partnership C public company D public corporation

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2013

19 In 2011, the UK-based Rio Tinto, the world’s second largest mining company, decided to bid for Australian Coal and Allied Industries, another mining company. Which economic concepts could be involved in this decision? A amalgamation and external economies B international finance and forward vertical integration C monopoly power and horizontal integration D multinational company and a more competitive market

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2013

13 A large tyre manufacturer expands by taking over a rubber plantation. Of what is this an example? A backward vertical integration B diversifying integration C forward vertical integration D horizontal integration

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2014

12 A large tyre manufacturer expands by taking over a rubber plantation. Of what is this an example? A backward vertical integration B diversifying integration C forward vertical integration D horizontal integration

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2014

12 In 2013, a German company that manufactured medicines bought a UK company that ran a chain of pharmacies that sold medicines. What term best describes this takeover? A conglomerate B horizontal C vertical integration backwards D vertical integration forwards

1 marks

Answer: D

This question in 0455/11 May/June 2015

13 Sohrab bought shares in a French telecommunications company operating in many countries. Joel owns and runs a mobile telephone accessories and repair shop. What is not identified above? A multinational company B partnership C public company D sole proprietor

1 marks

Answer: B

This question in 0455/12 Feb/March 2016

13 Two firms agree to integrate their activities. What must result? A a change in their ownership structure B a lowering of average costs of production C a move from national to international markets D a reduction in the level of market risk

1 marks

Answer: A

This question in 0455/12 May/June 2016

28 A Japanese car manufacturer decided to produce its cars in a factory in Europe. What would not be a reason why they might have chosen to do this? A cheaper wage costs in Europe B the availability of raw materials C to gain external economies from skilled labour in Europe D to increase Japanese self-sufficiency

1 marks

This question in 0455/12 Oct/Nov 2016

12 A survey of managers in the USA revealed that most businessmen feel that a company’s responsibility is ‘to serve the interests of owners, employees, customers and the public’. The idea of profit maximisation, in contrast, implies that a company’s main responsibility should be to the A customers. B employees. C owners. D public.

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2016

12 To achieve horizontal integration, a firm producing tyres could merge with another firm producing A motor cars. B rubber. C tyre-producing machinery. D tyres.

1 marks

Answer: D

This question in 0455/11 May/June 2017

12 To achieve horizontal integration, a firm producing tyres could merge with another firm producing A motor cars. B rubber. C tyre-producing machinery. D tyres.

1 marks

Answer: D

This question in 0455/12 May/June 2017

12 To achieve horizontal integration, a firm producing tyres could merge with another firm producing A motor cars. B rubber. C tyre-producing machinery. D tyres.

1 marks

Answer: D

This question in 0455/13 May/June 2017

13 What distinguishes a multinational company from other types of company? A It exports its products. B It imports its raw materials. C It produces outside its country of origin. D It promotes its products in trade fairs abroad.

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2017

13 Private multinational clothing companies operate in developing countries to reduce their average costs of production. Which feature of developing countries attracts them for this purpose? A In developing countries, clothing workers receive low wages. B In developing countries, foreign managers are allowed to pay no income tax. C In developing countries, multinationals are allowed to take profits out of the country. D In developing countries, there is a large market for fashion clothing.

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2017

9 Which change will make a manufacturing company replace labour with capital to maintain the most efficient combination of factors of production? A The price of machinery has increased. B The productivity of labour has increased. C The productivity of machinery has increased. D The supply of labour has increased.

1 marks

Answer: C

This question in 0455/13 May/June 2018

13 A film production company purchases a group of cinemas. Of what is this an example? A backward vertical integration B conglomerate merger C forward vertical integration D horizontal integration

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2018

13 A computer chip manufacturer expands by taking over a computer chip designer. Of what is this an example? A backward vertical integration B diversifying integration C forward vertical integration D horizontal integration

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2018

12 A large bakery buys a flour mill. Which form of integration is this? A conglomerate B horizontal C vertical backwards D vertical forwards

1 marks

Answer: C

This question in 0455/11 May/June 2019

12 Which business organisation is most likely to have unlimited liability? A co-operative B multinational C public limited company D sole trader

1 marks

Answer: D

This question in 0455/13 May/June 2019

9 Which organisations can directly fund the growth of firms? central commercial government bank banks A no yes no B no yes yes C yes no no D yes no yes

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2019

12 A public limited company has shares which are A freely transferable on the stock exchange. B owned by the government. C owned only by its workers. D restricted in their transferability.

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2019

15 A mining company bought another mining company. How may this integration be described? A diversification B horizontal merger C specialisation D vertical merger

1 marks

This question in 0455/12 Feb/March 2020

8 The wage of labour in a firm increases. What is the most likely effect on the production process? A Capital replaces labour immediately. B Capital replaces labour in the long run. C Labour replaces capital immediately. D Labour replaces capital in the long run.

1 marks

Answer: B

This question in 0455/11 May/June 2020

15 A government owns and runs an airline. Which combination of ownership and sector is this? ownership sector A private secondary B private tertiary C public secondary D public tertiary

1 marks

Answer: D

This question in 0455/13 May/June 2020

13 Why are many hairdressers able to operate as small businesses? A high level of competition B high scope for economies of scale C long period of training required D low start-up and running costs

1 marks

Answer: D

This question in 0455/11 May/June 2021

13 A Swedish furniture maker bought a Romanian firm that owned 83 000 hectares of trees. Which type of merger is this most likely to be? A diversification B horizontal C vertical backward D vertical forward

1 marks

Answer: C

This question in 0455/12 May/June 2021

22 The table compares the distribution of employment in selected industries in two years. employment in millions industry year 1 year 2 agriculture 4 3 mining 2 2 manufacturing 6 6 retailing 4 4 transport 4 5 total 20 20 How did the distribution of employment change between year 1 and year 2? primary sector secondary sector A fell rose B fell unchanged C rose fell D rose unchanged

1 marks

Answer: B

This question in 0455/12 May/June 2021

13 How would advertising a good result in a retail firm increasing its market share? A It will improve the personal service in its shops. B It will increase the firm’s costs. C It will reduce demand for competitors’ products. D It will result in diversification in the firm.

1 marks

Answer: C

This question in 0455/13 May/June 2021

15 Two car manufacturers agree to merge. Which outcome would be a disadvantage for customers? A increased capital for research and development B lower average costs through economies of scale C reduced range of vehicles produced D use of a wider range of marketing information

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2021

15 A clothing manufacturer expands by taking over a clothing retailer. Which type of merger is this? A backward vertical B conglomerate C forward vertical D horizontal

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2021

11 Which firm is most likely to be classified as a small firm in the tertiary sector? A a farm B a hairdresser C a steelworks D a supermarket

1 marks

Answer: B

This question in 0455/12 May/June 2022

9 Which organisations can directly fund the growth of firms? central commercial governments banks banks A no yes no B no yes yes C yes no no D yes no yes

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2022

30 A manufacturing firm in a low-income country has decided to close. What is most likely to have caused this decision? A increase in foreign multinational companies operating in its country B increase in global demand for its products C increase in its productivity D increase in subsidies received from its government

1 marks

Answer: A

This question in 0455/11 Oct/Nov 2022

9 Which organisations can directly fund the growth of firms? central commercial governments banks banks A no yes no B no yes yes C yes no no D yes no yes

1 marks

Answer: B

This question in 0455/12 Oct/Nov 2022

9 Which organisations can directly fund the growth of firms? central commercial governments banks banks A no yes no B no yes yes C yes no no D yes no yes

1 marks

Answer: B

This question in 0455/13 Oct/Nov 2022

14 A firm provides a personal service to its customers. It prefers to remain labour-intensive rather than changing to more capital-intensive production. Which aspect of remaining labour-intensive would support this choice? A Customer satisfaction is higher. B Production costs are higher. C Production is less flexible. D Quality of customer service is worse.

1 marks

Answer: A

This question in 0455/13 Oct/Nov 2022

15 Why might one profitable oil-drilling firm wish to take over another profitable oil-drilling firm? A to bring its suppliers into the same firm B to get closer to its customers to increase sales C to reduce its costs per unit of output D to reduce the amount of corporation tax it paid

1 marks

Answer: C

This question in 0455/13 Oct/Nov 2022

30 What may be a cost to its home country when a multinational company (MNC) expands abroad? A Increased competition from the MNC may force firms in the host country to close. B Many jobs created by the MNC may be low-skilled. C The MNC’s profits from the host country may be sent to its home country. D The MNC may cause job losses in its home country by moving production abroad.

1 marks

Answer: D

This question in 0455/13 Oct/Nov 2022

14 Which conditions are most likely to attract small firms to enter a market? fixed costs of the market for entering the the product industry A local high B local low C national high D national low

1 marks

Answer: B

This question in 0455/11 May/June 2023

15 The table shows the activities of four firms. firm 1 firm 2 firm 3 firm 4 shoe website shoe shoe manufacture design manufacture retailer Which combination of firms would be an example of horizontal integration? A 1 and 2 B 1 and 3 C 2 and 4 D 3 and 4

1 marks

Answer: B

This question in 0455/13 May/June 2023

14 An airline takes over an online clothing company. What is an advantage of such a move by the airline? A to diversify their operations B to generate economies of scale C to improve lines of communication D to increase market share

1 marks

Answer: A

This question in 0455/12 Oct/Nov 2023

11 What shows a forwards vertical merger? A A smartphone producer buys a computer chip producer. B A steel producer buys a car producer. C A tractor producer buys a wheat producer. D An oven producer buys a washing machine producer.

1 marks

Answer: B

This question in 0455/12 Feb/March 2024

13 Which service is most likely to be supplied by a small business? A banking B dental treatment C energy distribution D rail travel

1 marks

Answer: B

This question in 0455/12 Feb/March 2024

12 Which combination shows the advantages of a small firm over a larger firm? better greater lower average cost communication independence A no no yes B no yes no C yes yes no D yes yes yes

1 marks

Answer: C

This question in 0455/12 May/June 2024

12 A fast-food multinational bought a food-ordering website, in order to allow the multinational’s customers to download menus and make advance payments. Which term best describes this merger? A backward vertical B conglomerate C forward vertical D horizontal

1 marks

Answer: C

This question in 0455/12 Oct/Nov 2024

13 What would be most likely to encourage a firm to grow internally? A when diseconomies of scale occur at low levels of output B when economies of scale occur at high levels of output C when new firms enter the market and increase competition D when the firm only supplies the local market

1 marks

Answer: B

This question in 0455/12 Feb/March 2025

20 The table shows the distribution of the working population in millions (m) in various sectors of an economy over two years. year 1 year 2 economic sector employment (m) employment (m) education 4 3 engineering 6 8 farming 2 1 finance 8 6 healthcare 4 5 motor vehicle production 5 5 oil extraction 2 2 What can be concluded from the information? A Less output was produced in the economy in year 2 than year 1. B Fewer people were employed in the secondary sector in year 1 than year 2. C More people were employed in the primary sector in year 2 than year 1. D More people were employed in the tertiary sector in year 2 than year 1.

1 marks

Answer: B

This question in 0455/12 Feb/March 2025

14 What is most likely to increase the demand for labour in an industry? A a decrease in the price of capital used by the industry B a decrease in the productivity of labour in the industry C an increase in the demand for the industry’s product D an increase in the wage paid to labour in the industry

1 marks

Answer: C

This question in 0455/13 May/June 2025

8 Which pair of economic institutions can be found in a market economy? A charities and public sector firms B multinational companies and commercial banks C public sector firms and private sector firms D stock exchanges and government-funded hospitals

1 marks

Answer: B

This question in 0455/11 Oct/Nov 2025

14 To be able to produce a car tyre, rubber is required. If a car tyre manufacturer merges with a supplier of rubber, which type of merger is this? A conglomerate B horizontal C internal D vertical

1 marks

Answer: D

This question in 0455/12 Oct/Nov 2025