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Total 140 questions
Exam Code: BA1                Update: Oct 16, 2025
Exam Name: Fundamentals of Business Economics

CIMA Fundamentals of Business Economics BA1 Exam Dumps: Updated Questions & Answers (October 2025)

Question # 1

The main purpose of government competition policy is to

A.

Prevent mergers between large companies

B.

Restrict anti-competitive behavior by firms

C.

Limit the ability of firms to secure long run excess profits

D.

Enforce competition by breaking up large firms

Question # 2

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

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 # 3

An example of forward vertical integration is

A.

The merger between Mercedes and Chrysler in the car industry

B.

A car manufacturer taking over an engine factory

C.

The Ford car company producing refrigerators

D.

A car manufacturer investing in a chain of car showrooms and dealers

Question # 4

A rise in the demand for petrol by motorists is likely to follow a rise in the price of:

A.

Steel

B.

Second-hand cars

C.

Public transport

D.

Motor insurance

Question # 5

All of the following statements about a firms total revenue curve are true except which ONE?

A.

Because the price of a product falls as more is supplied to the market the curve is not a straight line

B.

Price elasticity of demand for the product = 1 at the highest point of the curve

C.

If price of the product rose the curve would pivot upwards

D.

The curve would be a horizontal straight line if demand for the product were perfectly price elastic

Question # 6

If in the short run a business raises the output of its product then

A.

average fixed cost will remain constant over the whole range of output

B.

average variable cost will fall over the whole range of output

C.

average total cost will initially fall and then rise as output is increased

D.

average total cost will fall until constant returns to scale achieved

Question # 7

In the short run average variable costs may fall as output rises. Which ONE of the following is a cause of this?

A.

Fixed costs are spread across a larger amount of output

B.

The firm enjoys economies of scale

C.

Greater efficiency in use of variable resources such as labor

D.

Total costs rise less than proportionately with output

Question # 8

Total economic welfare derived from an activity will be maximized if the activity is undertaken up to the point at which

A.

Marginal private benefit exceeds marginal private cost

B.

Marginal social benefit equals marginal social cost

C.

Marginal social benefit equals marginal private benefit

D.

Marginal private benefit equals marginal private cost

Question # 9

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

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

Question # 10

Which ONE of the following would make the market supply of a product price elastic?

A.

Suppliers are unable to store unsold product

B.

Firms can join the industry easily

C.

Demand is price elastic

D.

There is a shortage of resources to make the product

Page: 1 / 14
Total 140 questions

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