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Exam : CIPs A6
Title : Analysing the Supply Market


1. Q3 Which of the following best describes the pricing policy known as 'promotional pricing' ?(2 marks)
A. A high price aimed at quick recovery of costs
B. A price in line with that being charged by competitors
C. A temporary price reduction to increase sales in the short term
D. A low price set to gain a large share of the market.
Answer: C

2. Q2 Which of the following relationships best describes a small change in demand as a result of a large change in price? (2 marks)
A. Inelastic
B. Explicit
C. Implicit
D. Elastic
Answer: A

3. Q4 Which of the following is the most likely consequence of government decreasing interest rates? (2 marks)
A. People spend more
B. People spend less
C. The economy slows down
D. The cost of borrowing goes up
Answer: A

4. Q1 In economic theory, which of the following statements best describes what is available and what is wanted? (2 marks)
A. Time and motion
B. Supply and demand
C. Research and development
D. Input and output
Answer: B

5. Q5 Which of the following best defines the economic term 'budget surplus'?(2 marks)
A. Government expenditure equalling government revenue
B. Government revenues creating government expenditure
C. Government expenditure exceeding government revenue
D. Government revenue exceeding government expenditure
Answer: D

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