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Fundamentals of Business Economics
Last Update: Apr 9, 2024
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Fundamentals of Business Economics Practice Questions

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Fundamentals of Business Economics Questions and Answers

Questions 1

Company X is a wholesaler. It sells the majority of its products in bulk to a small number of restaurants and cafes in the local area.

Which of the following will Company X experience in light of this?

Select ALL that apply.



A reduction in distribution costs as a result of economies of scale


A reduction in the number of staff needed to perform certain roles within the company


The company will not be able to buy in bulk at a discount in the future


The company will not be able to maximise efficiency due to rapid business growth


It will not experience the benefits of economies of scale

Questions 2

Which of the following are reasons why the principal-agent problem is so critical for businesses? Select ALL that apply.



It limits the control of one layer of management over another


It can lead to dubious managerial practices within the company


It leads to higher profits which ultimately benefit a business


Higher sales means the business will perform well regardless of managerial practice


Co-ordination needs to be good in order for multiple layers of management to function well

Questions 3

Best for Beer is a brewery based in the UK. In the last year, it has seen its sales decrease by 23%. During the same period, the British Government has launched and run a public health campaign against excessive

alcohol consumption due to the rising number of incidents related to excessive alcohol consumption or 'binge-drinking' in the country.

Which of the following sources would be most relevant for Best for Beer to discover more about the public health campaign's effect on sales?



News media


Online surveys for customers


Employment briefings


Trade journals


Legal information