Cima C04 Exam Question No 36

Question No 36:

All of the following are example of the sources of internal economies of scale for a business except one. Which ONE is the EXCEPTION?

A. Lower external financing costs for a larger firm
B. Greater specialisation of tasks in its labour force
C. Lower supply costs resulting from its bulk buying
D. Lower production costs resulting from long run technical change in the economy

Answer: D

Cima C04 Exam Question No 35

Question No 35:

The optimum level of output for a business is where:

A. Profits are maximised
B. Revenue is maximised
C. Marginal cost is minimised
D. Average cost is minimised

Answer: A

Cima C04 Exam Question No 34

Question No 34:

The profit maximising level of output for a business is where:

A. Average costs are lowest
B. The difference between total cost and total revenue is greatest
C. Where average revenue is highest
D. Where average revenue is equal to average cost

Answer: B

Cima C04 Exam Question No 33

Question No 33:

The break even output for a firm will be where:

A. Average cost is equal to average revenue
B. Average cost is at a minimum
C. Average revenue starts to fall
D. Average cost starts to rise

Answer: A

Cima C04 Exam Question No 32

Question No 32:

The profit-maximising output will always be where:

A. Average cost = marginal revenue.
B. Marginal cost = marginal revenue.
C. Average cost = average revenue.
D. Marginal cost = average revenue.

Answer: B

Cima C04 Exam Question No 31

Question No 31:

 The initial fall for a business in the short run average cost per unit of its output is the result of:

A. Diminishing returns to a fixed factor
B. Diseconomies of scale
C. The spreading of fixed cost over a larger output
D. A fall in total variable costs

Answer: C

Cima C04 Exam Question No 30

Question No 30:

In order to remain in business in the short run, a firm’s revenue must be sufficient to cover:

A. Its fixed costs
B. Its variable costs
C. Its total costs
D. Its total costs minus normal profit

Answer: B

Cima C04 Exam Question No 29

Question No 29:

All of the following are internal economies of scale for a firm EXCEPT which ONE?

A. The firm is able to reduce administration costs per unit of output when it opens a second production plant.
B. The firm can buy raw materials from other firms at lower prices when it buys in bulk.
C. TV advertising costs can be spread over a larger output.
D. Training costs are reduced when the firm can draw on the development of pool of skilled labour in the region due to colleges setting up training courses for the industry.

Answer: D

Cima C04 Exam Question No 28

Question No 28:

The minimum condition for a business to continue to operate in the short run is that?

A. Its revenue is sufficient to cover variable costs.
B. Its revenue is at least equal to its total costs.
C. Its marginal revenue is equal to its marginal cost.
D. It is making normal profits.

Answer: A

Cima C04 Exam Question No 27

Question No 27:

If, in the long run, a business doubles all the inputs it uses, but total physical output less than doubles, the business is experiencing:

A. Diminishing returns.
B. Decreasing returns to scale.
C. Price elasticity of demand of less than 1
D. Market saturation

Answer: B

Cima C04 Exam Question No 26

Question no 26:

Which of the following are reasons why future income is usually valued less than current income?
(i) Inflation may reduce the value of future income
(ii) Future income flows are riskier than current flows
(iii) The lender must delay the pleasure from the consumption that the money could buy now
(iv) Higher interest rates

A. (i) and (ii) only
B. (i) and (iii) only
C. (ii), (iii) and (iv) only
D. (i), (ii) and (iii) only

Answer: D

Cima C04 Exam Question No 25

Question No 25:

Which of the following might lead to a rise in earnings per share for a company?

A. A rise in corporate tax
B. An issue of new shares
C. A fall in its rate of return on capital employed
D. A fall interest rates

Answer: D

Cima C04 Exam Question No 24

Question No 24:

 X plc has 1 million shares issued. It has an EPS figure of $0.10. X is planning a new investment project which is expected to raise profits after tax by $50,000. This project will be financed by an issue of an additional 250,000 shares. After the project is completed, the new EPS will be:

A. $0.2
B. $0.12
C. $0.08
D. $0.15

Answer: B

Cima C04 Exam Question No 23

Question No 23:

All but one of the following are characteristics of all organisations. Which ONE is the not a characteristic of all organisations?

A. The pursuit of objectives
B. The need to measure performance
C. They need to compete with other organisations
D. They have a range of stakeholders

Answer: C

Cima C04 Exam Question No 22

Question No 22:

Not-for-profit organizations have all the following features except one, which ONE is the EXCEPTION?

A. They need to be efficiently run
B. They often have a range of organization objectives
C. Their primary aim is to make financial surpluses
D. They have more than one group of stakeholders

Answer: C

Cima C04 Exam Question No 21

Question No 21:

Which of the following issues are true of objectives in non-for-profit organisations?
(i) Conflict between the goals of different stakeholders
(ii) A complex set of objectives
(iii) Difficulty in setting measures for their performance
(iv) Those that benefit from the good or service offered may not pay for it

A. (i), (ii) and (iii) only
B. (ii), (iii) and (iv) only
C. (i), (iii) and (iv) only
D. All of them

Answer: D

Cima C04 Exam Question No 20

Question No 20:

Which of the following groups are stakeholders in a business organisation?

(i) Employees
(ii) Shareholders
(iii) Management
(iv) Customer’s
(v) Suppliers

A. (i), (ii) and (iii) only
B. (i), (ii), (iii) and (iv) only
C. (ii) only
D. All of them

Answer: D

Cima C04 Exam Question No 19:

Question No 19:
  
Which of the following is the most appropriate for indicating long term shareholder wealth?

A. Net present value
B. Rate of return on capital
C. Earnings per share
D. Profit

Answer: C

Cima C04 Exam Question No 18

Question No 18:

Multinational companies locate production in more than one country for all of the following reasons EXCEPT which ONE?

A. The existence of trade barriers.
B. High transport costs.
C. Capital is internationally immobile.
D. To increase market share.

Answer: B

Cima C04 Exam Question No 17

Question No 17:

The process of globalization leads to all of the following EXCEPT which ONE?

A. Increasing foreign competition in domestic markets.
B. Decreasing interdependence of national economies.
C. Greater international division of labor.
D. Rising levels of international trade relative to national income.

Answer: B

Cima C04 Exam Question No 16

Question No 16:

All of the following are features of globalization EXCEPT which ONE?

A. Rising trade ratios for countries.
B. Increased international capital flows.
C. Improved terms of trade for all countries.
D. Reduced barriers to international factor movements.

Answer: C

Cima C04 Exam Question No 15

Question No 15:

All of the following are characteristics of a common market EXCEPT which ONE?

A. Free trade in goods and services among member states.
B. Common levels of direct taxation.
C. Free movement of factors of production between member states.
D. A common external tariff.

Answer: B

Cima C04 Exam Question No 14

Question NO 14:

All of the following are reasons for trans-national companies locating production of a good in more than one country except one. Which ONE is the EXCEPTION?

A. The existence of trade barriers.
B. Significant transport costs.
C. Economies of scale in production.
D. Differences in demand conditions between countries.

Answer: C

Cima C04 Exam Question No 13

Question No 13:

If a country were to join a free trade area, its business sector would gain because:

A. It could get tariff-free raw materials from countries inside the free trade area.
B. There would be exchange rate stability between the member countries.
C. Prices of competitors from countries not in the free trade area would rise.
D. There would be fewer barriers to establishing subsidiaries in other countries in the free trade area.

Answer: A

Cima C04 Exam Question No 12

Question No 12:

An expansionary fiscal policy would be most likely to reduce unemployment if the country had:

A. A high marginal propensity to import
B. A low marginal propensity to save.
C. A high marginal tax rate.
D. A low marginal propensity to consume.

Answer: A

Cima C04 Exam Question No 11

Question No 11:

All of the following are disadvantages of inflation EXCEPT which ONE?

A. It redistributes wealth from debtors to creditors.
B. It reduces international competitiveness.
C. Market price signals are distorted.
D. Fixed income earners experience a fall in real income.

Answer: A

Cima C04 Exam Question No 10

Question No 10:

The balance of payments accounts are defined as:

A. The difference between the government’s receipts and its expenditure over the period of a year.
B. The difference between the exports of goods and services and imports of goods and services over the period of a year.
C. The surplus or deficit on a country’s international trade over a given period.
D. A statement of the economic transactions between residents of a country and the rest of the world over a given period.

Answer: D

Cima C04 Exam Question No 9

Question No 9:

A slowdown in economic growth in the US would be transmitted to the rest of the world by all
EXCEPT which ONE of the following processes?

A. A fall in US interest rates.
B. A fall in the US demand for imports.
C. A decline in the level of US capital flows to the rest of the world.
D. Falling US stock market prices leading to similar falls in other countries.

Answer: A

Cima C04 Exam Question No 8

Question No 8:

All of the following are benefits for a business from depreciation (reduction) in the rate of exchange for the country’s currency EXCEPT which ONE?

A. The business could charge lower prices for its exports.
B. Imported raw materials used by the business would be cheaper.
C. The business could raise profit margins on exports without losing sales.
D. In its home market, the business would face reduced competition from imports.

Answer: B

Cima C04 Exam Question No 7

Question No 7:

Which ONE of the following would lead a country’s balance of payments current account to move towards a surplus?

A. A rise in commodity imports.
B. An inflow of foreign capital into the economy.
C. An increase in foreign tourism into the country.
D. An increase in government tax receipts.

Answer: C

Cima C04 Exam Question No 6

Question No 6:

Which ONE of the following would lead to a fall in the value of the multiplier?

A. A decrease in the marginal propensity to consume.
B. A fall in the level of public expenditure.
C. Consumers saving a lower proportion of their income.
D. A decrease in the marginal propensity to import.

Answer: A

Cima C04 Exam Question No 5

Question No 5:

All of the following government policies would tend to raise national income over time EXCEPT which ONE?

A. Increased expenditure on the economic infrastructure.
B. Tax cuts to encourage higher demand from consumers.
C. Policies to encourage the training of labour.
D. Financial incentives to encourage personal and corporate saving.

Answer: D

Cima C04 Exam Question No 4

Question no 4:

In the circular flow model of the economy, the level of national income will always reach equilibrium because:

A. Injections and withdrawals are always equal.
B. Withdrawals are a function of the level of income.
C. Governments will change taxes and expenditure to ensure equilibrium.
D. Expenditure equals income.

Answer: B

Cima C04 Exam Question No 3

Question No 3:

The effects of low real interest rates include all of the following EXCEPT which ONE?

A. Credit-based sales will tend to be high.
B. Nominal costs of borrowing will always be low.
C. Business activity will tend to increase.
D. Investment will be encouraged.

Answer: B

Cima C04 Exam Question No 2

Question No 2:

Supply side policy is designed to?

A. Raise the level of aggregate monetary demand in the economy.
B. Manage the money supply in the economy.
C. Improve the ability of the economy to produce goods and services.
D. Reduce unemployment by limiting the supply of labour.

Answer: C

Cima C04 Exam Question No 1

Questions No 1:

The recession phase of the trade cycle?

A. Is often caused by excessive consumer expenditure.
B. Is normally characterised by accelerating inflation.
C. Is most prolonged when the country has high levels of imports.
D. Is usually caused by falling aggregate monetary demand.

Answer: D