Lesson 1.2.2

1.2.2 Factors that change supply Quiz: Pearson Edexcel Business, Unit 1

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 1.2.2, Factors that change supply: 20 multiple choice questions for the Pearson Edexcel Business (9BS0), Unit 1: Marketing and people, written with Revision Ninja.

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The 20 questions

  1. Which factor causes a market supply curve to shift to the right?

    • Higher wage rates
    • Government subsidy
    • Higher component costs
    • Higher indirect tax

  2. How does an increase in indirect tax affect a product's supply curve?

    • Causes downward movement
    • Causes upward movement
    • Shifts it left
    • Shifts it right

  3. Which event is a direct change in a business's costs of production?

    • Increased ad spending
    • Higher oil prices
    • Higher consumer income
    • Lower indirect tax

  4. How does introducing cost-saving technology usually affect the supply curve?

    • Shifts it right
    • Causes downward movement
    • Shifts it left
    • Makes it vertical

  5. Which event is an external shock that directly reduces market supply?

    • A severe drought
    • An ad campaign
    • A wage rise
    • An indirect tax

  6. What is a government financial grant paid to producers called?

    • A tariff
    • A dividend
    • A subsidy
    • An indirect tax

  7. How does a decrease in worker wage rates affect market supply?

    • Supply increases
    • Supply decreases
    • Supply stays unchanged
    • Demand increases

  8. A firm's total cost is £5,000 for 1,000 units. Costs then rise by 10%. What is the new unit cost?

    • £5.50
    • £6.00
    • £5.00
    • £5.10

  9. A producer receives £4.00 per unit from buyers plus a £0.50 per unit subsidy. What is its effective revenue per unit?

    • £4.00
    • £4.50
    • £2.00
    • £3.50

  10. Which event causes the supply curve for coffee to shift to the left?

    • New harvesting technology
    • Poor harvest weather
    • Lower fertiliser prices
    • Government subsidies

  11. What is the main long-term effect of automation on unit costs?

    • Unit costs rise
    • Unit costs fall
    • Unit costs unchanged
    • Fixed costs fall

  12. How does a rise in key raw material costs affect supply?

    • Shifts supply left
    • Shifts supply right
    • Shifts demand right
    • Shifts demand left

  13. Which tax is an example of an indirect tax on goods?

    • Income Tax
    • Value Added Tax
    • National Insurance
    • Corporation Tax

  14. Unplanned factory closures during a pandemic shift which curve to the left?

    • The demand curve
    • The supply curve
    • The revenue curve
    • The cost curve

  15. What effect does a government subsidy have on market equilibrium price and quantity?

    • Price falls, quantity rises
    • Price rises, quantity falls
    • Price rises, quantity rises
    • Price falls, quantity falls

  16. A technology cuts variable cost from £3 to £2.50 per unit. Fixed cost is £12,000 and output is 8,000 units. What is the saving?

    • £4,000
    • £2,000
    • £8,000
    • £1,500

  17. What direct effect does a government subsidy have on a firm's unit costs?

    • Reduces unit costs
    • Eliminates fixed costs
    • Doubles variable costs
    • Increases unit costs

  18. A producer absorbs most of an indirect tax when price elasticity of demand is:

    • Zero
    • Unitary
    • Inelastic
    • Elastic

  19. An external shock reduces supply in a market. What happens to equilibrium price?

    • Price drops completely
    • Price falls
    • Price stays constant
    • Price rises

  20. A firm's unit cost rises from £6 to £7.50, and it raises its price from £9 to £10.50 to keep the same profit per unit. By what percentage did the price rise?

    • 25.0%
    • 12.5%
    • 16.7%
    • 15.0%

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