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Fundamentals of Business Economics

Last Update 23 hours ago
Total Questions : 468

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Question # 21

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

Options:

A.  

Consumer expenditure will fall as price rises

B.  

Producers' incomes will rise as price falls

C.  

It is a product with many close substitutes

D.  

Total quantity sold will fall as price rises

Discussion 0
Question # 22

All of the following statements about a firms total revenue curve are true except which ONE?

Options:

A.  

Because the price of a product falls as more is supplied to the market the curve is not a straight line

B.  

Price elasticity of demand for the product = 1 at the highest point of the curve

C.  

If price of the product rose the curve would pivot upwards

D.  

The curve would be a horizontal straight line if demand for the product were perfectly price elastic

Discussion 0
Question # 23

Which of the following can be efficiently allocated between competing uses by the price mechanism?

Options:

A.  

Private goods

B.  

Public goods

C.  

Free goods

D.  

Externalities

Discussion 0
Question # 24

A rise in the demand for petrol by motorists is likely to follow a rise in the price of:

Options:

A.  

Steel

B.  

Second-hand cars

C.  

Public transport

D.  

Motor insurance

Discussion 0
Question # 25

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:

A.  

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

B.  

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

C.  

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

D.  

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

Discussion 0
Question # 26

Which ONE of the following is NOT a class of stakeholder?

Options:

A.  

Connected

B.  

Internal

C.  

External

D.  

Collaborative

Discussion 0
Question # 27

A firm will maximize profits by producing at that level of output where

Options:

A.  

average total cost is at a minimum

B.  

average revenue is at a maximum

C.  

the difference between total costs and total revenue is greatest

D.  

the difference between average revenue and average variable cost is greatest

Discussion 0
Question # 28

Production of a good is in the public interest if

Options:

A.  

Social benefits are greater than social costs

B.  

Private benefits equal private costs

C.  

External benefits equal external costs

D.  

Social costs are greater than private costs

Discussion 0
Question # 29

Country X is a country highly reliant on its oil exports. However, in recent months, oil prices have fallen by 20%. It is located near Country Y, an oil exporter which is a member of a trading bloc. Country X has some coal reserves, but faces stiff competition from Country Z, a member of the trading bloc, which also exports coal.

Which of the following would be the most effective way for the government to alleviate these circumstances?

Select ALL that apply.

Options:

A.  

Purchase oil produced within the country in order to support the domestic oil industry

B.  

Invest in retraining those working in the oil industry so they can enter other domestic industries which are currently more profitable

C.  

Dump its oil exports into the trading bloc by exporting the oil at an artificially low price

D.  

Begin extracting and exporting coal as a substitute for oil

E.  

Allow the oil industry in Country X without any further investment to fail as it is a sunset industry

Discussion 0
Question # 30

Which of the following is an example of fiscal policy?

Options:

A.  

The central bank imposing controls on bank lending

B.  

The removal of foreign exchange controls which restrict the transfer of currencies between countries

C.  

The removal of regulations which restrict Sunday trading

D.  

The creation of tax-exempt savings accounts to encourage savings

Discussion 0
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