In a local market, Stephanie notices that the number of apples available for sale is equal to the number of apples that customers want to buy. What is the role of Equilibrium in this market?
IGCSE Economics-Introduction to Business Terms Test

Quiz
•
Social Studies
•
9th Grade
•
Medium
David smith
Used 2+ times
FREE Resource
10 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
To maximize profits
To balance supply and demand
To increase production
To reduce costs
Answer explanation
Equilibrium in a market is crucial as it represents the point where supply equals demand, ensuring that resources are allocated efficiently. This balance prevents shortages and surpluses, making 'to balance supply and demand' the correct choice.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In a local market, April and Rain are selling fruits. When the number of fruits they have matches exactly with the number of customers wanting to buy them, what happens in the market?
Prices fluctuate rapidly
Supply exceeds demand
Demand exceeds supply
Supply equals demand
Answer explanation
When a market is in equilibrium, supply equals demand. This means that the quantity of goods supplied matches the quantity demanded, leading to stable prices and no excess supply or demand.
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
In a small town, Ammar and Mason own competing coffee shops. What does their business competition refer to?
Collaboration between companies
Rivalry among companies to attract customers
A monopoly in the market
Government regulation of businesses
Answer explanation
Business competition refers to the rivalry among companies to attract customers. This competition drives innovation and better services, unlike collaboration, monopolies, or government regulation.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Siwoo is starting a new manufacturing business. What does 'capital' include in the context of production for his business?
Tools, machinery, and buildings
Natural resources like water and minerals
Human creativity and innovation
Land and soil
Answer explanation
In the context of production, 'capital' refers to tools, machinery, and buildings used to create goods and services. These are essential for enhancing productivity, unlike natural resources, human creativity, or land.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is an example of 'capital' in a factory setting where Thomas works?
The factory building
The factory workers
The raw materials
The factory manager
Answer explanation
In a factory setting, 'capital' refers to physical assets used in production. The factory building is a key example, as it provides the space and infrastructure necessary for operations, unlike workers, raw materials, or management.
6.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Mason and Stephanie are discussing the different sectors of the economy. Mason mentions that the secondary sector is responsible for manufacturing finished goods. What is an example of a finished good produced by the secondary sector?
Raw materials
Retail services
Cars
Healthcare
Answer explanation
Cars are a finished good produced by the secondary sector, which involves manufacturing and processing. In contrast, raw materials are inputs, retail services are part of the tertiary sector, and healthcare is a service.
7.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
During a school project, Thomas and Muizz decided to explore different sectors of the economy. They learned that one sector provides services rather than goods. Which sector were they studying?
Primary
Secondary
Tertiary
Quaternary
Answer explanation
The tertiary sector focuses on providing services, such as healthcare, education, and retail, rather than producing goods. This distinguishes it from the primary sector (raw materials) and secondary sector (manufacturing).
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