O-LevelEconomicsMicroeconomic decision makers2281/12 · Oct/Nov 2015 · Q141 Mark

A company supplying water spent $470 million creating a network of pipes to distribute water more efficiently. It employed local workers and boosted the local economy. It also provided better facilities for the tourist industry. What cannot be concluded from the above?

AThe company increased its profits.

BThere was a decrease in regional unemployment.

CThere were fixed costs of $470 million.

DThere were positive externalities.

✓ Correct answer

A: The company increased its profits.

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, Oct/Nov 2015 Paper 1 Variant 2, question 14.

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