CIMA Updated BA1 Exam Questions and Answers by sylvia

Both demand and supply tend to be price inelastic

Large shifts in demand combined with supply that is price inelastic

Large supply shifts under the impact of unstable weather conditions

Both demand and supply tend to be price elastic

MC=MR

Price elasticity of demand is less than 1

Point of greatest excess of total revenue over total costs

Total cost curve has the same slope as the total revenue curve

Economic welfare always increases

The problem of government failure may result

In all cases the market mechanism ceases to function

The intervention always creates a surplus

Price will stay high as farmers restrict supply to make extra profits

Price will fall because the high price in 201X gave an incentive to farmers to plant more and flood the market with extra supply

Price will fall as consumers find cheaper substitutes to the high-priced crop

Price will rise further as buyers stockpile the new harvest to avoid suffering higher prices for a second year