Lesson 3.1.3

3.1.3 Understanding that businesses operate within an external environment Quiz: AQA Business, Unit 1

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

In partnership with Revision Ninja

Lesson 3.1.3, Understanding that businesses operate within an external environment: 20 multiple choice questions for the AQA Business (7132), Unit 1: What is business?, written with Revision Ninja.

Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.

Host this setFree Play

The 20 questions

  1. Which factor represents a demographic influence on consumer demand for products?

    • Lower exchange rates
    • An ageing population
    • Increased income tax
    • Rising interest rates

  2. Which external factor directly affects the cost of borrowing for a business?

    • Environmental issues
    • Demographic factors
    • Exchange rates
    • Interest rates

  3. What happens to the demand for normal goods when consumer incomes rise?

    • It decreases
    • It increases
    • It stays constant
    • It becomes zero

  4. How does adopting fair trade principles typically affect a business's raw material costs?

    • Has zero impact
    • Eliminates costs
    • Increases costs
    • Decreases costs

  5. How does an increase in market competition usually affect a firm's pricing power?

    • Reduces pricing power
    • Eliminates variable costs
    • Increases pricing power
    • Guarantees sales

  6. Which environmental factor directly increases a business's operational costs through government taxation?

    • Increased competition
    • Demographic shifts
    • Carbon tax
    • Rising interest rates

  7. Which term refers to the level of demand, competition, and growth within a specific market?

    • Exchange rates
    • Market conditions
    • Demographic factors
    • Interest rates

  8. A business has a 500,000 variable-rate loan and the base rate rises by 1 percentage point, which passes fully to the loan. What is the extra interest per year?

    • 50,000
    • 500
    • 5,000
    • 10,000

  9. Which industry is most likely to experience increased demand from an ageing population?

    • Healthcare
    • Nursery childcare
    • Skateboarding
    • Youth fashion

  10. What happens to demand for luxury goods when consumer incomes increase?

    • Rises substantially
    • Falls rapidly
    • Drops to zero
    • Stays unchanged

  11. A rival opens a cheaper outlet nearby and a business's weekly sales fall from 1,200 to 900 units. What is the percentage fall?

    • 75%
    • 25%
    • 20%
    • 33%

  12. Switching to higher-priced fair trade ingredients directly increases which type of cost?

    • Capital costs
    • Variable costs
    • Fixed costs
    • Sunk costs

  13. How does a strengthening pound typically affect demand for UK exports abroad?

    • Demand is unaffected
    • Demand increases
    • Demand decreases
    • Demand doubles

  14. What typically happens to demand for luxury goods during an economic recession?

    • Demand stays constant
    • Demand falls
    • Demand doubles
    • Demand rises

  15. Which external factor changes when a local area experiences a rapid rise in young residents?

    • Exchange rates
    • Demographics
    • Interest rates
    • Inflation

  16. Which goods are least affected in demand when interest rates rise?

    • Luxury goods
    • Non-essential goods
    • Essential goods
    • Credit-funded goods

  17. A business sells 20,000 units at 8, with variable costs of 4 per unit and fixed costs of 30,000. Competition forces a 10% price cut, and an environmental levy adds 1 per unit. What is the new profit?

    • 20,000
    • 14,000
    • 34,000
    • 50,000

  18. How should a supermarket adapt its product range to cater for an ageing population?

    • Target older consumers
    • Reduce store sizes
    • Ignore demography
    • Focus on teenagers

  19. What happens to the demand for inferior goods during an economic downturn?

    • Prices fall
    • Demand stops
    • Demand decreases
    • Demand increases

  20. A business has 2,000,000 of debt at 4% interest, with profit before interest of 1,000,000. The rate rises to 6%. What is the new profit after interest?

    • 1,000,000
    • 920,000
    • 880,000
    • 840,000

All AQA Business quizzes