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Free CIMA BA1 Practice Exam with Questions & Answers | Set: 10

Questions 91

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

Options:
A.

0.8%

B.

8.0%

C.

18%

D.

80%

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Questions 92

Which of the following industries would be expected to have the largest number of businesses operating within them?

Options:
A.

Automobiles

B.

Banking and insurance

C.

Commercial airlines

D.

Agriculture

Questions 93

If a firm increases employment of all its factors of production by 50% and as a result output increases by 60%, it has experienced

Options:
A.

Increasing productivity of labor

B.

Increasing returns to scale

C.

External economies of scale

D.

The benefits of the division of labor

Questions 94

Assume the demand for cheese is price elastic. Which of the following describes the effect of a rise in demand for cheese?

Options:
A.

Higher price, more sold, fall in revenues of cheese makers

B.

Higher price, less sold, fall in revenues of cheese makers

C.

Higher price, more sold, rise in revenues of cheese makers

D.

Higher price, less sold, rise in revenues of cheese makers

Questions 95

A market for a normal good is in equilibrium. What will happen in this market if there was an increase in consumer incomes?

Options:
A.

The demand curve would shift to the right, the equilibrium price would rise and there would be an increase in supply

B.

The demand curve would shift to the left, the equilibrium price would fall and there would be a contraction in supply

C.

The demand curve would shift to the right, the equilibrium price would rise and there would be an extension in supply

D.

The demand curve would shift to the left, the price would fall and there would be a decrease in supply

Questions 96

Which ONE of the following statements does NOT describe a position of profit maximization?

Options:
A.

MC=MR

B.

Price elasticity of demand is less than 1

C.

Point of greatest excess of total revenue over total costs

D.

Total cost curve has the same slope as the total revenue curve

Questions 97

Which of the following is NOT a characteristic of a pure public good?

Options:
A.

It is not possible to exclude non-payers from enjoying the good

B.

It is always provided by the state or public sector

C.

It does not get used up by more people enjoying it

D.

It has no price

Questions 98

Which of the following provides a definition of a free good?

Options:
A.

No charge is made for it by its supplier

B.

Its provision is financed by taxation

C.

It is produced from renewable resources

D.

It is available at zero cost of production in unlimited quantities

Questions 99

A shift in the supply curve for a good will have the biggest effect on the market price when the demand curve for the good

Options:
A.

is highly price elastic

B.

is highly price inelastic

C.

has unit price elasticity

D.

is perfectly price elastic

Questions 100

If a government, on grounds of economic efficiency, were to levy a tax on an industry because of the pollution caused by production in the industry, the tax should be equal to

Options:
A.

the amount required to eliminate consumer demand for the product

B.

the excess profits earned by the industry

C.

the costs of clearing up previous pollution caused

D.

the difference between the private and social costs of production

Exam Code: BA1
Certification Provider: CIMA
Exam Name: Fundamentals of Business Economics
Last Update: Jul 12, 2025
Questions: 468

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