An example of a external cost.
Cost of land
Cost of construction
Labour costs
Pollution
If business damages environment, which of the following could take action to harm the firms’ reputation and sales?
Pressure groups
Court
Political parties
None of the above
Why might a firm not respond to pressure group activity?
Well organized and funded
The cost to the business of changing its methods is more than the possible cost of poor image and lost sales
They have public support and in the media
Consumer boycotts cause reduced sales
Which of the following is not a disadvantage of new technology?
New machines expensive
Research and development expensive
Staff retraining expensive
Make new products more competitive
Which one of the following given below is not an external constraint of business?
Technological change: New products.
Technological change: New production processes.
Employees problems
Environmental issues.
An example of a private cost.
Pollution caused by waste products
Health hazards
Money made from the sale of products
How does new hi-tech production methods make business more competitive?
Increasing productivity & lowering average costs
Decreasing productivity & lowering average costs
Increasing productivity & increasing average costs
Decreasing productivity & increasing average costs
Licenses to pollute up to a certain level.
Penalties
Laws
Pollution permits
Which one is an argument in favour of social responsibility of business?
Governments should pay to clean it up.
Protecting the environment is too expensive and reduces profits.
Increased prices mean increased costs.
Using up scarce resources leaves less for future generations and raise prices.
When is a scheme likely to be accepted in cost benefit analysis?
When the social benefits is greater than the social costs
When the social benefits is less than the social costs
When the social benefits is equal to the social costs
