Lesson 4.2.3

4.2.3 Assessing a country as a production location Quiz: Pearson Edexcel Business, Unit 4

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 4.2.3, Assessing a country as a production location: 20 multiple choice questions for the Pearson Edexcel Business (9BS0), Unit 4: Global business, written with Revision Ninja.

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The 20 questions

  1. Which government incentive directly reduces tax obligations for foreign firms setting up production?

    • Tax holiday
    • Trade quota
    • Import tariff
    • Price floor

  2. How is return on investment calculated when evaluating a new production site?

    • Profit over investment
    • Revenue over profit
    • Profit over sales
    • Sales over cost

  3. How does proximity to abundant natural resources primarily benefit a manufacturing firm?

    • Raises tax liabilities
    • Increases tariff barriers
    • Lowers wage costs
    • Lowers input costs

  4. What is the primary benefit of locating a production plant inside a trade bloc?

    • Lower wage rates
    • Tariff-free trade
    • Higher import tariffs
    • Zero income tax

  5. Labour cost is 12 per hour and a worker produces 4 units per hour. What is the labour cost per unit?

    • 48
    • 3
    • 8
    • 0.33

  6. What main drawback can offset the benefit of low wage rates in a production location?

    • High import tariffs
    • Excess skilled labour
    • High training costs
    • Strong exchange rates

  7. Which term describes a nation's transport links, power networks, and communication systems?

    • Supply chain
    • Trade bloc
    • Exchange rate
    • Infrastructure

  8. Which financial obligation is directly reduced by a government tax holiday?

    • Import tariff
    • Value added tax
    • National insurance
    • Corporation tax

  9. A firm invests 2 million and earns annual profit of 300,000. What is the return on investment?

    • 150%
    • 0.15%
    • 6.7%
    • 15%

  10. Which factor assesses the speed of getting regulatory permits when opening a factory?

    • Ease of doing business
    • Political stability
    • Infrastructure quality
    • Government incentives

  11. Why should a firm avoid choosing a production site based solely on government financial grants?

    • Grants increase tariffs
    • Grants prevent exports
    • Grants raise wages
    • Grants are temporary

  12. Which location factor focuses on the presence of workers with required qualifications and expertise?

    • Exchange rate
    • Trade bloc status
    • Labour skill level
    • Infrastructure quality

  13. Why do heavy manufacturing firms often locate close to their required raw material sources?

    • Increases tax relief
    • Lowers wage costs
    • Reduces transport costs
    • Minimises trade tariffs

  14. Which factor represents a major political risk when investing in an overseas production facility?

    • Civil unrest
    • High interest rates
    • Skill shortages
    • Currency depreciation

  15. A factory costs 5 million, and the move saves 800,000 a year. What is the payback period?

    • 6.25 years
    • 4 years
    • 0.16 years
    • 8 years

  16. Why might a location with very low wage costs still produce a low return on investment?

    • Tariff-free trade
    • Low labour productivity
    • High tax incentives
    • High market demand

  17. What is the main trade advantage of producing inside a trading bloc?

    • Tariff-free trade
    • Higher import quotas
    • Subsidised transport costs
    • Fixed exchange rates

  18. Which location factor reflects the availability of ports and airports for moving goods?

    • Exchange rate
    • Infrastructure
    • Political stability
    • Disposable income

  19. How does a depreciation in a host country's currency affect local production costs for a foreign firm?

    • Eliminates tax liability
    • Reduces converted costs
    • Increases import tariffs
    • Raises wage rates

  20. Which financial measure calculates the overall profitability expected from opening a new factory overseas?

    • Break-even output
    • Operating profit margin
    • Net cash flow
    • Return on investment

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