CIMA CIMAPRA17-BA1-1 Exam Practice Test Instant Access

Question 1

Best for Beer is a brewery based in the UK. In the last year, it has seen its sales decrease by 23%. During the same period, the British Government has launched and run a public health campaign against excessive

alcohol consumption due to the rising number of incidents related to excessive alcohol consumption or 'binge-drinking' in the country.

Which of the following sources would be most relevant for Best for Beer to discover more about the public health campaign's effect on sales?

ANews media

BOnline surveys for customers

CEmployment briefings

DTrade journals

ELegal information

Answer : A, B

Question 2

A business can always raise its profits or reduce its losses by increasing output

Aproviding total revenue rises as a result

Bif it is operating on the downward sloping part of its average cost curve

Cproviding total revenue rises faster than total variable costs

Dif it is operating on the upward sloping part of its total revenue curve

Answer : C

Question 3

Beth wants to take out an annuity in order to be able to leave more money to her children when she passes away. She has looked at three annuities with different payout rates.

Annuity A pays out 5340 each year over 14 years

Annuity B pays out 4900 each year over 9 years

Annuity C pays out 5445.64 each year over 20 years

The current interest rate is 8%.

Of these, which annuity would have the highest net present value and hence pay out more money for Beth over its lifetime?

A53,460.10

B44,024.23

C30,609.75

D60,455.63

Answer : A

Question 4

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?

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

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

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

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

Answer : A

Question 5

MNO is considering moving production to a developing country. Which ONE of the following would NOT reduce its production costs?

AMNO can choose from a wider choice of suppliers or production locations

BThe move will increase the length of MNO's supply chains

CMNO may benefit from a superior skill base in some emerging economies

DReduced employment regulation in some emerging economies may cut staff costs

Answer : B

Question 6

If a firm wishes to maximize market share without incurring a loss, it should set its price where

AMarginal revenue is zero

BMarginal revenue equals marginal cost

CPrice equals marginal revenue

DTotal cost equals total revenue

Answer : D

Question 7

Which of the following best describes a project that has a negative Net Present Value?

AA loss making project

BA project that doesn't make enough profit to pay the interest on the money borrowed to invest in it

CA project that doesn't make sufficient returns to fully compensate investors for the funds they invest in it

DA project that will only start making profits after the present year has finished

Answer : C

CIMA BA1 - Fundamentals of Business Economics CIMAPRA17-BA1-1 Exam Practice Test