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Free CIMA BA1 Practice Exam with Questions & Answers | Set: 9

Questions 81

The country Messu Potami is a key exporter of steel. However, its prominence as a steel exporter is partially due to its manipulating of exchange rates by buying large amounts of other countries' currencies.

How best can neighbouring countries prevent the cheap exports produced by Messu Potami from affecting their own domestic markets?

Options:
A.

Impose a fixed tariff on imports coming from Messu Potami

B.

Impose an embargo on imports coming from Messu Potami

C.

Negotiate a VERA which would restrict the amount of Messu Potamian products entering these countries' domestic markets

D.

Provide a subsidy to markets directly competing with Messu Potamian exports to eliminate any unfair competition

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Questions 82

Atu, a new social media platform, has launched an advertising campaign directed at areas of Country X where there is a higher proportion of young people than elsewhere.

Which source is most likely to have been used by Atu to acquire this data?

Options:
A.

Demographic statistics published in a census

B.

The l{ addresses of computers in these areas

C.

The level of youth unemployment as recorded by the government

D.

The prominence of other brands focused on young people in the area

Questions 83

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?

Options:
A.

An inflationary gap, where demand outstrips output

B.

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

C.

The attainment of full employment within the economy

D.

The contraction of the national economy

Questions 84

The British Government has decided to invest £10m in the Department of Education to build new schools in the most deprived areas of the country.

In what way does this benefit the British economy?

Options:
A.

It is a supply-side policy which will lead to a more productive workforce in the future

B.

It is a policy which will increase demand internationally for the higher standard of education in Britain

C.

It will lead to a reduction in taxes

D.

It will lead to more private sector involvement in education

Questions 85

If, when the price of a good increases, the total revenue received by the supplier decreases, then

Options:
A.

the demand for the good must be price inelastic

B.

the demand for the good must be price elastic

C.

the demand for the good must have unitary elasticity

D.

the supply of the good must be price inelastic

Questions 86

Which ONE of the following statements about profit is true?

Options:
A.

Normal profit will rise if the cost of production is falling as output increases

B.

Profit per unit is equal to the difference between average revenue and average total cost

C.

The point of profit maximization is always where average costs are lowest

D.

A rise in output will always raise profits provided total revenue is rising

Questions 87

The market demand for a good has a price elasticity of demand of 0.4. Which of the following statements is correct?

Options:
A.

Consumer expenditure will fall as price rises

B.

Producers' incomes will rise as price falls

C.

It is a product with many close substitutes

D.

Total quantity sold will fall as price rises

Questions 88

When a minimum price is imposed on a good by the government, which is above the equilibrium price:

Options:
A.

Excess supply will result

B.

Trading will continue at the equilibrium price

C.

Excess demand will result

D.

Firms will fulfill their market plans at this price

Questions 89

Which of the following is likely to cause the demand curve of margarine to shift to the left?

Options:
A.

A fall in the price of margarine

B.

A fall in the cost of vegetable oils

C.

A successful advertising campaign by butter producers

D.

A fall in the price of bread

Questions 90

Which of the following statements most accurately describes the role of an agent as defined in principal-agent theory?

Options:
A.

An employee of the organization

B.

An owner of the organization

C.

One who is paid by the owners of the organization

D.

One who is responsible for ensuring the organization pursues the interests of its owners

Exam Code: BA1
Certification Provider: CIMA
Exam Name: Fundamentals of Business Economics
Last Update: Jul 10, 2025
Questions: 468

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