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Free CPA-Business Exam Braindumps (page: 53)

Page 53 of 132
PDF with 530 Questions

If demand is unit elastic:

  1. An increase in price will result in a decline in total revenue.
  2. An increase in price will result in a decline the quantity demanded that is less than the increase in price.
  3. An increase in price will result in an increase in total revenue.
  4. An increase in price will have no effect on total revenue.

Answer(s): D

Explanation:

Choice "d" is correct. If demand is unit elastic, a change in price will have no effect on total revenue. Choices "a", "b", and "c" are incorrect, per the above statement.



Which of the following is incorrect with regard to government intervention in market operations?

  1. Government intervention may create a price different from the market price, thus causing either a surplus or a shortage.
  2. A price ceiling is a price that is established above the equilibrium price, which causes a surplus to develop.
  3. Price floors are minimum prices established by law, such as minimum wages and agricultural price supports.
  4. Rationing limits the availability of certain goods to a specified level, which lowers demand and prices for a given supply.

Answer(s): B

Explanation:

Choice "b" is an incorrect statement and the correct choice. A price ceiling is a price that is established below the equilibrium price, which causes a shortage to develop. The statement in choice "b" defines a price floor. Choices "a", "c", and "d" are correct statements.



Which of the following is incorrect with regard to value chain analysis?

  1. Value chain analysis must be used in conjunction with the strategic plan of the organization.
  2. Value chain analysis is critical to assessing the competitive advantage of a firm.
  3. Value chain analysis is a strategic tool that assists the firm in determining how important the perceived value of the buyers is with respect to the market the firm operates in.
  4. The value chain starts with the firm and goes all the way through to the end users of the product.

Answer(s): D

Explanation:

Choice "d" is an incorrect statement and the correct choice. The best description of a value chain is that value starts with the suppliers who provide the raw materials for a production process, continues with the firm and its strategic plan, continues with the value created by the customers, and then ends with the disposal and recycling of the materials.
Choices "a", "b", and "c" are incorrect, as all are correct statements with regard to value chain analysis.



According to Michael Porter, which of the following are the two major categories of business activities?

  1. Demand activities and supply activities.
  2. Firm activities and customer activities.
  3. Primary activities and support activities.
  4. Internal activities and external activities.

Answer(s): C

Explanation:

Choice "c" is correct. According to Michael Porter, the two major categories of business activities are primary activities and support activities.
Choices "a", "b", and "d" are incorrect, per the above statement.



Page 53 of 132



Post your Comments and Discuss AICPA CPA-Business exam with other Community members:

Venkatesh commented on September 08, 2023
I don't see Internal Control/Information technology related questions
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Jay jain commented on May 25, 2023
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