In August 2008, Infosys, an Indian information technology company, bought Axon, a UK information technology company

Which type of integration is this?

A Conglomerate
B Horizontal
C Vertical backward
D Vertical forward[J10/P1/Q19]

Answer is B

Horizontal integration is the acquisition of a business operating at the same level of the value chain in the same industry—that is, they make or offer similar goods or services.









Which type of business organisation has its shares quoted on a stock exchange?

A co-operative
B private company
C public company
D public corporation{N11/P1/Q18)

Answer is C

A public company is a company whose shares are traded freely on a stock exchange.






Mr Jones runs a small shop selling household appliances

His total revenue has declined due to the opening of a large supermarket which sells a similar range of goods

How could Mr Jones compete with the supermarket?

A develop financial economies of scale
B engage in a price-cutting war
C introduce a massive advertising campaign
D provide personal after-sales service {N11/P1/Q19]

Answer is D

It is unlikely that Mr Jones would be able to use options A, B and C, due to the size of it's firm.








General Motors, a large multi-national company based in the United States, sold some of its European car assembly plants to other car manufacturers during the world recession (economic downturn) in 2009

Which economic reason would have been most likely to influence this decision?


A to benefit from horizontal integration of manufacturing
B to diversify and expand its product range
C to encourage vertical integration of sales and production
D to reduce its excess capacity in car production {N11/P1/Q21]

Answer is B


Product diversification is a good strategy to adobt during a recession.










Which is a diseconomy of scale?

A Bulk buying reduces costs
B Communications deteriorate
C Employees are more motivated
D Technological improvements take place(J12/P1/Q17}

Answer is B


Poor Communication is an example of diseconomies of scale. As a firm grows, it acquires more workers and creates more departments.










Domino's, the largest US pizza chain, decided also to sell sandwiches in an attempt to increase its revenue Which term describes this change?

A Amalgamation
B diversification
C externalities
D vertical integration {[J12/P1/Q19]

Answer is B

Diversification is a growth strategy that involves entering into a new market or industry - one that your business doesn't currently operate in - while also creating a new product for that new market.













Which of these statements made by an Economics student about different types of business organisation is true?

A Partnerships face problems in raising large sums of finance
B Private companies cannot have limited liability
C Public companies operate in the public sector of the economy
D Public corporations operate in the private sector of the economy [J121P1/Q20]

Answer is A

This is a common problem with partnerships.









In January 2008, ICI, a major UK chemical firm, was bought by its rival, a Dutch chemical firm

What definitely occurred when the Dutch firm bought ICI?

A a partnership
B economies of scale
C horizontal integration
D an increased profits[N12/P1/Q19]

Answer is C


Horizontal integration is a business strategy in which one company grows its operations at the same level in an industry. H












To achieve horizontal integration, a firm producing tyres could merge with another firm producing

A motor cars
B rubber
C tyre-producing machinery
D tyres

(J171P1/Q12]

Answer is D

Horizontal integration is a business strategy in which one company grows its operations at the same level in an industry. H












Which is an internal diseconomy of scale?

A a lack of communication in a firm
B a reduction of cost by buying in bulk
C a shortage of skilled labour in an area
D traffic congestion in a particular area(N17/P1/Q12]

Answer is A

Poor Communication is an example of diseconomies of scale. As a firm grows, it acquires more workers and creates more departments.