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CIMA BA1 Based on Real Exam Environment

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Question 28

industrial action is more likely to occur within a large organisation than a small organisation, due to senior management becoming re managers becoming complacent, as well as shop floor hostility. The effect of this will be an increasing average cost as production

The statement above is most closely describing an example of which of the following?

Options:

A.

External diseconomy of scale.

B.

Internal diseconomy of scale

C.

Internal economy of scale

D.

External economy of scale

Question 29

If the government imposed a legal minimum wage that was above the market equilibrium wage, the resulting unemployment would be the greatest when:

Options:

A.

the demand for labor and the supply of labor are both price inelastic

B.

the demand for labor and the supply of labor are both price elastic

C.

the demand for labor is price inelastic and the supply of labor is price elastic

D.

the demand for labor is price elastic and the supply of labor is price inelastic

Question 30

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

Options:

A.

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

B.

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

C.

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

D.

XYZ's Board conceals information about losses from shareholders

Question 31

Which ONE of the following statements best describes the impact of a government price floor (minimum price) set below free market price?

Options:

A.

It will create a shortage of the product and incentives for producers and consumers to evade the policy

B.

It will create a surplus of unsold produce that will need to be paid for from taxation

C.

It will not affect market price or producer incomes at the present time

D.

It will increase farm incomes but eventually force the government to introduce maximum quotas on production

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Exam Code: BA1
Exam Name: Fundamentals of Business Economics
Last Update: Oct 10, 2024
Questions: 468
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