Mock

All of the following would be expected to raise share values EXCEPT which one? 

• An announcement of higher than expected profits

• A reduction in corporation tax

• A rise in interest rates

• A rise in share prices on overseas stock markets

The principal - agent problem refers to:

•   situations where a company's selling agents are not meeting the company's main sales targets

• problems arising when a principal delegates authority to an agent but cannot ensure the agent will always act in his/her interest

• cases where companies lack knowledge on particular markets and have to seek agents to act on their behalf

• the power a large company may exert over suppliers when it is the dominant buyer of that supplier's output

If a business currently sells 10,000 units of its product per month at $10 per unit and the demand for its product has a price elasticity of -2.5, calculated using the non-average arc method, a rise in the price of the product to $11 will: 

• raise total revenue by $7,250

• reduce total revenue by $17,500

• reduce total revenue by $25,000

•   raise total revenue by $37,500

Which TWO of the following would be most likely to be classified as BOTH private sector AND profit seeking?

•   A charity that raises funds from the public for medical research

• A limited company that sells motor parts

• A co-operative supermarket

• A school operated by a local government authority

• A partnership that offers accountancy services

A good which is characterised by both rivalry and excludability is called:  

• a public good

• a private good

• a government good

• an external good

Which ONE of the following is the best example of a merit good?   

 

• Street lighting

• A national defence force

• Company cars for top sales executives

•   A system of public libraries

All of the following are examples of where externalities are likely to occur EXCEPT which ONE?   

•   A business providing training schemes for its employees

• Government expenditure on vaccination programmes for infectious diseases

• Attending a concert given by a government funded orchestra

• Private motorists driving cars in city centres

A fall in the price of a good accompanied by a rise in the quantity sold would result from

 

• a decrease in supply

• an increase in demand

• a decrease in demand

•   an increase in supply

A business could use all of the following to finance a lack of synchronisation in its short­term payments and receipts EXCEPT which ONE?

• a bank overdraft

• trade credit

• its cash reserves

• a hire purchase agreement

Which of the following statements about the relationship between bond prices and bond yields is true?  

• They vary positively

• They vary inversely

• They vary inversely or positively depending on business conditions

• They are not related