CIPS A6 Practice Questions| TestInsights

Question 1

Which of the following best describes the pricing policy known as 'penetation' pricing? (2 marks)

AA price in line with that being charged by competitors

BA high price aimed at a quick recovery of costs

CA low price set to gain a large share of the market

DA temporary price reduction to increase sales in the short-term

Correct : C

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AA price in line with that being charged by competitors

BA high price aimed at a quick recovery of costs

CA low price set to gain a large share of the market

DA temporary price reduction to increase sales in the short-term

Question 2

According to economic theory, which of the following best describes what should happen to the sales of a product if the government increases the tax on them?

AThe sales increase

BThe sales decrease

CThe sales remain the same

DThe sales double.

Correct : C

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AThe sales increase

BThe sales decrease

CThe sales remain the same

DThe sales double.

Question 3

Which of the following provides the best definition of a 'mixed economy'?

AAn economy in which resource allocation and production levels are made by a centralized body

BAn economy in which firms attempt to make the largest profit and individuals try to get the best deals

CAn economy that earns a mix of revenue from both domestic and international trade

DAn economy in which there is some state intervention in the way of economic policy to manage the economy.

Correct : A

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AAn economy in which resource allocation and production levels are made by a centralized body

BAn economy in which firms attempt to make the largest profit and individuals try to get the best deals

CAn economy that earns a mix of revenue from both domestic and international trade

DAn economy in which there is some state intervention in the way of economic policy to manage the economy.

Question 4

Which of the following most closely reflects the 'traditional' view of a commercial organization's sole aim?

ATo maximize market share

BTo maximize profit

CTo maximize growth

DTo maximize capacity.

Correct : D

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ATo maximize market share

BTo maximize profit

CTo maximize growth

DTo maximize capacity.

Question 5

A price set in line with that charged by competitors.

APrivate Sector Business Results

BPrivate Sector Borrowing Requirement

CPublic Sector Borrowing Requirement

DPublic Sector Borrowing Review.

Correct : B

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APrivate Sector Business Results

BPrivate Sector Borrowing Requirement

CPublic Sector Borrowing Requirement

DPublic Sector Borrowing Review.

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