CIMA CIMAPRA17-BA1-1 Exam Questions Instant Access

Question 1

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?

AEnvironmental groups

BCurrent employees

CTrade unions

DLocal residents

Answer : A

Question 2

If the price elasticity of supply for a good over a certain price range is 0.8, the increase in the quantity supplied of that good, following a 10% increase in its price, will be

A0.8%

B8.0%

C18%

D80%

Answer : B

Question 3

A business has a contractual requirement to pay a sum of$6m in a foreign currency in 12 months time. It takes out a forward exchange contract from this sum.

AThis is an example of

BTranslation risk avoidance

CArbitrage

Dhedging

Answer : D

Question 4

Whenever demand for a good is price elastic, an increase in price will

AIncrease monopoly power

BIncrease consumer expenditure on the good

CIncrease consumer expenditure on a good in joint demand

DDecrease total consumer expenditure on the good

Answer : D

Question 5

A business could meet a short term financial need by all of the following except one. Which ONE is the exception?

AUsing its cash reserves

BA bank overdraft

CIssuing shares

DFactoring

Answer : C

Question 6

If a manufacturing firm contributes to global warming as a byproduct of its production process, this is an example of

AA merit good

BAn external social cost

CA diseconomy of scale

DA public good

Answer : B

Question 7

Which of the following organisational arrangements is an example of a multinational corporation (MNC)?

AAn insurance company based in Country E opens a sales office in Country F in order to service the local market

BA music production company based in Country C signs a contract with an artist's management company based in Country D.

CA retailer based in Country G uses an online retail platform in order to sell goods to customers in Country H.

DA chain of restaurants based in Country B signs a franchise agreement with a company that intends to open restaurants in Country A.

Answer : C

CIMA BA1 - Fundamentals of Business Economics CIMAPRA17-BA1-1 Exam Questions