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CIMAPRA17-BA1-1 Exam - Topic 1 Question 56 Discussion

If the production of a good involves an external social cost, resource allocation could be improved by:
B) imposing an indirect tax on the good
A) providing a subsidy for the consumers of 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.

CIMAPRA17-BA1-1 Exam - Topic 1 Question 56 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam
Question #: 56
Topic #: 1
[All CIMAPRA17-BA1-1 Questions]

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

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Suggested Answer: B

by Staci at Jul 29, 2022, 09:39 AM

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Thaddeus
10 months ago
Price controls? That's just gonna create shortages!
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Sina
10 months ago
Subsidies for producers just encourage more production, right?
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Patria
10 months ago
Wait, can a tax really fix this? Seems too simple.
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Alyce
11 months ago
Totally agree, taxes can help reduce consumption!
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Bulah
11 months ago
Imposing an indirect tax is a classic solution for external costs.
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Vicky
11 months ago
I’m confused about the price controls option. I don’t recall it being a good way to address external costs, but I could be wrong.
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Leslie
11 months ago
I feel like we practiced a question similar to this, and the answer was about correcting market failures. I think it was about taxes, so I’m leaning towards B too.
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Marguerita
11 months ago
I’m not entirely sure, but I remember something about subsidies potentially leading to overproduction. So maybe option B is better?
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Catalina
11 months ago
I think imposing an indirect tax on the good might be the right answer since it can help internalize the external costs.
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Cordelia
11 months ago
This seems like a straightforward question about loyalty promotions. I think the Cumulative Promotion is the best option here, since the company wants to encourage sustained engagement over time.
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Margurite
11 months ago
Hmm, I'm a bit unsure about the difference between catalogs, categories, and category sets. I'll need to think this through carefully.
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Yvonne
11 months ago
I'm pretty confident I know the answer to this one. The NIST and SANS frameworks are commonly used for security incident response, so I'll check those options.
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Dong
11 months ago
Okay, I've got this. Based on the detailed description, the answer has to be B - an explosion. That's the only choice that matches all the key details provided.
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