CIMA BA1 Exam Questions Free Practice Test

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Questions # 61:

When a minimum price is imposed on a good by the government, which is above the equilibrium price:

Options:

Excess supply will result

Trading will continue at the equilibrium price

Excess demand will result

Firms will fulfill their market plans at this price

Expert Solution

Questions # 62:

Merit goods are typically characterized by

Options:

non-excludability in consumption

external social costs in production

external social benefits in consumption

non-rivalry in consumption

Expert Solution

Questions # 63:

Which of the following statements is always true for a merit good?

Options:

It is characterized by non-excludability and non-rivalry

When consumed, the social benefits exceed the private benefits

Zero negative externalities result from the consumption of a merit good

It is provided free by the government

Expert Solution

Questions # 64:

Which of the following statements that refer to the price mechanism is not true?

Options:

Imperfect market information may prevent the market working efficiently

Trading can only take place at equilibrium prices in a market economy

A fall in the relative price of a good tends to attract consumers to buy that good instead of other goods

In a market economy some essential goods may not be produced.

Expert Solution

Questions # 65:

Which of the following are external stakeholders for an organization?

i. Shareholders

ii. Customers

iii. Government

iv. Trade Unions

v. Pressure groups

vi. Employees

Options:

(i), (ii) and (iii) only

(ii), (iii) and (iv) only

(iii), (iv) and (v) only

(i), (v) and (vi) only

Expert Solution

Questions # 66:

The market demand for a good has a price elasticity of demand of 0.4. Which of the following statements is correct?

Options:

Consumer expenditure will fall as price rises

Producers' incomes will rise as price falls

It is a product with many close substitutes

Total quantity sold will fall as price rises

Expert Solution

Questions # 67:

Which ONE of the following is NOT a symptom of the principal-agent problem in company XYZ?

Options:

The pay of the directors of XYZ is not related to the company's financial performance

XYZ loses money following a risky investment in a new line of business

The family of the Chief Executive of XYZ use the company jet for shopping trips

XYZ's Board conceals information about losses from shareholders

Expert Solution

Questions # 68:

RST plc wishes to maximize its profits. At present it is producing where MC is less than MR. Which ONE of the following would NOT be good advice for RST plc?

Options:

Reduce output

Advertise the product to increase demand

Cut fixed costs

Produce a higher output

Expert Solution

Questions # 69:

Which of the following are examples of long run internal economies of scale?

i. Mass production using robot machine tool technology

ii. Obtaining lower prices when buying raw materials in bulk

iii. Long run technical change in the industry

iv. The emergence of specialized training institutions for the industry

v. Lower borrowing costs for large firms

vi. The spreading of fixed costs over a larger output

Options:

(i), (ii) and (iii) only

(ii), (iii) and (v) only

(i), (ii) and (v) only

(i), (iv) and (vi) only

Expert Solution

Questions # 70:

Which of the following statements most accurately describes the role of an agent as defined in principal-agent theory?

Options:

An employee of the organization

An owner of the organization

One who is paid by the owners of the organization

One who is responsible for ensuring the organization pursues the interests of its owners

Expert Solution

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