Question 1

Which ONE of the following is NOT required in calculating the EPS of ABC plc?

Options :

A : The market price of ABC-s share

B : The number of shares ABC has in issue

C : The most recent earnings after interest and tax of ABC

D : The dividend payment made to holders of preference shares

Answer: A

Question 2

Real GDP per capita in an economy is directly affected by

(i). The quantity of resources located in the economy

(ii). How efficiently the economy uses resources when producing goods and services

(iii). The size of the working population

(iv). The flow of investment income from abroad

Options :

A : (i) and (iv) only

B : (i) and (ii) only

C : (ii), (iii) and (iv) only

D : (i), (ii) and (iii)

Answer: D

Question 3

The main purpose of government competition policy is to

Options :

A : Prevent mergers between large companies

B : Restrict anti-competitive behavior by firms

C : Limit the ability of firms to secure long run excess profits

D : Enforce competition by breaking up large firms

Answer: B

Question 4

If the production of a good involves an external social cost, resource allocation could be improved by:

Options :

A : providing a subsidy for the consumers of the good

B : imposing an indirect tax on the good

C : providing a subsidy for the producers of the good

D : the government imposing price controls to reduce the price of the good.

Answer: B

Question 5

PlusTech is a video games company with staff based in Los Angeles, California, London, UK, and Berlin, Germany. PlusTech currently employs 20 people to develop and market its games, while the distribution is

handled by RPGInternational, a separate company.

Why should PlusTech adopt multiple business structures in order to succeed in the video games industry?

Select ALL that apply.

Options :

A : The videogames industry is international, therefore the company should adopt the model of a virtual organisation

B : The small number of staff the company has means it has to form a strategic alliance with RPGInternational in order to distribute its games

C : The company needs to be technologically advanced so as to remain a market leader in the industry

D : The company has no direction, therefore does not stick to one particular business model

E : The company does not have the revenue to increase its staff numbers

F : The company is at risk of not succeeding if it does not adopt various business models

Answer: A,B

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