Free CIMAPRA17-BA1-1 Exam Braindumps (page: 47)

Page 47 of 118

All of the following would provide justification for government competition authorities to investigate the businesses involved except one.
Which ONE is the exception?

  1. The operation of a cartel
  2. A merger between the two dominant firms in an industry
  3. A price fixing agreement between two rival firms
  4. An advertising campaign directly targeting rival firms

Answer(s): D



When the government intervenes in the market economy to correct a market failure

  1. Economic welfare always increases
  2. The problem of government failure may result
  3. In all cases the market mechanism ceases to function
  4. The intervention always creates a surplus

Answer(s): B



Firms may suffer from X-inefficiency because of organizational slack. All of the following would lead to organizational slack except which one?

  1. Uncertainty about future demand
  2. Managers become more cautious
  3. A complex organizational structure in the firm
  4. The number of rival firms increases

Answer(s): D



All of the following are arguments for privatizing a public sector industry except which one?

  1. The profit motive will make the industry more efficient
  2. The industry will respond more to consumer wishes and preferences
  3. The industry is a natural monopoly
  4. Competition will force the industry to become more efficient

Answer(s): C



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