Question 1

Bishops Financial Services has outsourced its HR Department to Resources4U.

Which of the following is most likely to be considered when deciding to outsource parts of the business to another company?

Options :

A : Resources4U-s lack of business history

B : The cost of increasing the number of staff on the payroll

C : The small size of Bishops Financial Services as a business

D : The possibility of contract renegotiation at a future date

Answer: A

Question 2

PetsPlus Pic. has outsourced its marketing operations to the recently established marketing firm MarketMe. MarketMe has devised and distributed an online survey on behalf of PetsPlus Pic, asking customers to

evaluate the products they purchase from the company.

An example of a question from the survey is as follows:

'What do you think of PetsPlus's decision to outsource its marketing operations to a marketing firm?

Which of the following best describes why this question will not yield good information for PetsPlus?

Options :

A : Relevance

B : Accuracy

C : Reliability

D : Cost efficiency

Answer: A

Question 3

A typical supply curve of a good shows:

Options :

A : The quantities of the good firms actually sell at different possible prices

B : The quantities of the good firms are prepared to supply at different possible prices

C : Different possible equilibrium prices

D : Quantity supplied varying inversely with price

Answer: B

Question 4

ToyTown, a soft toy manufacturer, produces what it claims to be the cheapest teddy bears on the market. The graph shows the current price of a ToyTown teddy bear and its relationship to the demand for ToyTown teddy

bears.

If the price of ToyTown teddy bears were to increase, what would happen to the demand?

Options :

A : Demand would fall as consumers would look for alternative teddy bears to buy

B : Demand would increase because the teddy bears would be seen as more prestigious by consumers due to their higher prices

C : Demand would fall as the relationship between price and demand as shown in the graph is inelastic

D : Demand would increase as the relationship between price and demand as shown in the graph is elastic

Answer: A

Question 5

Which one of the following policies to correct a balance of payments current account deficit is an example of an expenditure reducing policy?

Options :

A : Depreciation of the currency.

B : The imposition of an import tax.

C : Increased income tax.

D : The use of import quotas.

Answer: C