CIMA BA1 - Fundamentals of Business Economics

Page: 5 / 14
Total 468 questions

The Lingford Miracle Association is a registered charity. It is closely associated with Lingford General Hospital. The charity has a number of goals.

Which of the following could potentially be goals set out by the Lingford Miracle Association given the information about the organisation that has been outlined?

To provide care for those who are terminally ill

To maintain a reasonable profit which can then be given as dividends to shareholders

To use the funding provided by government to further the primary cause of the organisation

To offer bonuses to the managing director of the organisation when a certain number of sales is reached in a year

To encourage members of the public to invest in the organisation through buying shares

Question # 42

A railway franchise in north-eastern Messu Potami has recently changed hands, and is now being operated by the company IstClass. However, IstClass already operate the railway franchise in northwestern Messu

Potami.

Which of the following courses of action would be most appropriate for the government of Messu Potami to take?

Select ALL that apply.

Establish a regulatory body to prevent a regional monopoly

Rerun the franchise bidding process if it found that IstClass are imposing additional price rises due to the regional monopoly

Allow the regional monopoly to exist, increasing fare prices for passengers on trains in both north-western and north-eastern Messu Potami

Impose a uniform sales tax on all railway tickets which would equalise prices across the country

Immediately nationalise the railway network, ending all private franchises and thus any regional monopolies

Question # 43

.phone, a smartphone manufacturer, currently dominates the smartphone market.

Which of the following may explain why this is beneficial for the smartphone industry?

.phone's monopoly in the industry allows for better research and development, thus leading to better and more frequent technological advances

.phone's monopoly in the smartphone industry allows it to produce its phones at a more affordable price

.phone's monopoly allows the company to increase supply and therefore make smartphones more available, especially to those in developing markets

.phone's monopoly allows it to increase its own profits significantly, therefore benefiting the market as a whole

Question # 44

Government X has just increased taxes in order to limit spending and hence demand.

Which of the following is most likely to have been the cause of this fiscal policy?

An inflationary gap, where demand outstrips output

A drop in prices caused by other fiscal policy instruments, e.g. a reduction in business taxes

The attainment of full employment within the economy

The contraction of the national economy

Question # 45

The share price of Quench Drinks has been steadily falling for several years despite steady sales and a slight market share increase over the last 5 years. They have been criticised for being full of sugar and not

capitalising on the health food trend.

Quench are starting to face pressure from their shareholders to push the share price back up.

Which of the following would be most likely to improve Quench's standing in the soft drinks market?

Select ALL that apply.

Release a new protein shake, QuenchFit

Publishing an advert in a major magazine promoting QuenchFit and the benefits of healthy living

Relocate the company to a country with less strict public health guidelines

Continue as normal

Appoint a new CEO

Question # 46

RubTech has decided to build a new rubber production facility just outside the semi-rural town of Pettisbury. The majority of workers at the plant are to be sourced from abroad.

Which of the following could potentially be negative externalities of the decision to build the production facility?

Production processes

Rood congestion

The decision to source workers from abroad

Antisocial behaviour

The high unemployment rate in the local area

The poor infrastructure in the local area

Question # 47

The government has set a maximum house price due to a massive house price rise in the last decade. This is denoted by the line Q1Q2 on the graph.

Which of the following may occur in light of the introduction of the maximum house price as it appears on the graph?

Select ALL that apply.

There will be a shortage of housing supply in Lingford.

A 'black market' may develop in housing, meaning the maximum price is ignored.

There will be a surplus of housing supply in Lingford.

Landowners will continue to build residential properties at the same rate as before the maximum price was implemented.

It is not likely that the maximum house price will need some sort of reform in the near future.

Question # 48

The manger of a branch of retailer Brilliant Buys wants to calculate the correlation between employee happiness and productivity. He has ranked each of the 10 employees at his branch in both fields, as shown to the left.

What degree of correlation is there between productivity and happiness at Brilliant Buys, using Spearman's coefficient?

High correlation

Moderate correlation

Low correlation

No correlation

Question # 49

The economy of Country V is initially in equilibrium at a level of national income and employment denoted by Y, at price level denoted by P If there is an increase in aggregate demand, indicate on the graph below the new equilibrium point in the economy.