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CIMA BA1 - Fundamentals of Business Economics

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Total 468 questions

DigiRecords is an international retailer of CDs and DVDs. It has, however, started selling BluRoy players and discs.

Which of the following may have had an impact on DigiRecords' decision to begin selling BluRay players and discs?

A.

The increase in demand for BluRay and the subsequent decrease in demand for DVDs

B.

The inexpensive nature ofBluRays compared with DVDs

C.

A decrease in the number ofBluRays being sold

D.

An increase in the number of DVDs being sold

Golden Crisp Cereals plans to build its new factory on the outskirts of Bimbleton, an affluent medium-sized town where its current headquarters is based. The area where they are planning to build the factory was

formerly a country park.

Of the following, which stakeholder would be most likely to protest against the construction of the new Golden Crisp Cereals factory?

A.

Environmental groups

B.

Current employees

C.

Trade unions

D.

Local residents

Which of the following is an internal economy of scale?

A.

The bank offering cheap loans to large companies

B.

The local government runs a scheme which allows business to get rid of their rubbish without charge

C.

A university discovers a new algorithm which makes manufacturing 3x faster

D.

A new highway is built from a large port into a manufacturing town

If out of every £20 million increase in national income, £2 million is saved, £4 million is spent on imports and £4 million is paid to the government in taxation, an increase in exports of £40 million will lead to an eventual increase in national income of

A.

£20 million

B.

£40 million

C.

£80 million

D.

£400 million

PlusTech is a video games company with staff based in Los Angeles, California, London, UK, and Berlin, Germany. PlusTech currently employs 20 people to develop and market its games, while the distribution is

handled by RPGInternational, a separate company.

Why should PlusTech adopt multiple business structures in order to succeed in the video games industry?

Select ALL that apply.

A.

The videogames industry is international, therefore the company should adopt the model of a virtual organisation

B.

The small number of staff the company has means it has to form a strategic alliance with RPGInternational in order to distribute its games

C.

The company needs to be technologically advanced so as to remain a market leader in the industry

D.

The company has no direction, therefore does not stick to one particular business model

E.

The company does not have the revenue to increase its staff numbers

F.

The company is at risk of not succeeding if it does not adopt various business models

Governments provide public goods, such as street lighting, because

A.

private business providers would exploit consumers and make excess profits

B.

it would be an unprofitable activity for private business because of the free-rider problem

C.

governments are more efficient producers of such goods

D.

there are significant external costs in the production process

A commercial airline uses its database to develop the following regression model to predict the cost of a flight Y (in dollars) by number of passengers:

Y = 1,570 +40 7x

Which of the following statements is correct in relation to the airline'?

A.

The cost of a flight will increase by $40.7 when an additional passenger is added to the flight.

B.

The regression model makes accurate predictions for this commercial airline, therefore it will provide good forecasts for other commercial airlines.

C.

The positive intercept in the model indicates a positive relationship between the cost of a flight and the number of passengers.

D.

If each pair of data points is plotted on a graph with Y on the vertical axis and X on the horizontal axis, there will be a downward sloping line.

Which THREE of the following businesses are more likely to fare belter during a recession?

A.

A construction company specialising in road infrastructure

B.

A producer of rice, a staple good

C.

A producer of automobiles, a durable good.

D.

A producer of security equipment, a counter-cyclical good

E.

A retailer specialising in fashion, a cyclical good.

F.

A construction company specialising in private residential accommodation

Pills Pharmaceuticals have compiled a component bar chart detailing the proportion of sales revenue the organisation receives from the sale of three groups of products: medical devices, contraceptives and day-to-day or prescription drugs.

In Month 2, which was the most profitable type of product?

A.

Pills Medical Devices

B.

Pills Contraceptives

C.

Pills Day-to-Day Tablets

Company X's government has a fiscal surplus. However, this has led to less investment in Company X's economy and an increased rate of unemployment.

Which of the following best describes how a fiscal surplus might be achieved, and why it may be necessary for a government to achieve one?

A.

When taxation exceeds public expenditure, and in order to limit inflation

B.

When public expenditure exceeds taxation, and in order to increase inflation

C.

When taxation and public expenditure are equal, and personal debt increases

D.

When taxation and public expenditure are equal, and personal debt decreases