Question 1

All of the following are examples of externalities except which one?

Options :

A : Pollution resulting from a production process

B : Firms training workers who then move to other employers

C : Some consumers being unable to afford goods because prices have been driven up by the demand from other consumers

D : Road congestion caused by rush hour traffic on the roads

Answer: C

Question 2

A market for a normal good is in equilibrium. What will happen in this market if there was an increase in consumer incomes?

Options :

A : The demand curve would shift to the right, the equilibrium price would rise and there would be an increase in supply

B : The demand curve would shift to the left, the equilibrium price would fall and there would be a contraction in supply

C : The demand curve would shift to the right, the equilibrium price would rise and there would be an extension in supply

D : The demand curve would shift to the left, the price would fall and there would be a decrease in supply

Answer: C

Question 3

Which of the following statements about the sources of stakeholder conflict is true?

Options :

A : Different stakeholders have different objectives

B : The various stakeholders have differing degrees of influence

C : Stakeholder conflict only occurs in not-for -profit organizations

D : Stakeholders with high interest sometimes have limited influence

Answer: A

Question 4

Which ONE of the following financial instruments is NOT issued for long term borrowing by the issuer?

Options :

A : Treasury bills

B : Equities

C : Treasury bonds

D : Mortgages

Answer: A

Question 5

All the following statements about small firms are correct except one. Which statement is incorrect?

Options :

A : Small firms do not generally raise finance on the capital market

B : Banks may refuse to lend to small firms because of the risk involved

C : Small firms are common in industries which display increasing returns to scale

D : Small firms are common in industries where there are niche markets

Answer: D

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