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CIMA Exam CIMAPRA17-BA1-1 Topic 1 Question 72 Discussion

Actual exam question for CIMA's CIMAPRA17-BA1-1 exam
Question #: 72
Topic #: 1
[All CIMAPRA17-BA1-1 Questions]

A good has a price elasticity of supply of 0.8. Which of the following best describes the effects of a rise in demand for this good?

1. More will be spent on the good

2. More of the good will be made and sold

3. Producer incomes will rise

4. Price rises more than proportionately to the rise in quantity produced

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Suggested Answer: A

by Carey at Jul 25, 2023, 06:25 AM

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Emeline
5 hours ago
I'm not sure, but I think the answer is A) 1 & 2 only.
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Amber
2 days ago
I disagree, I believe the answer is D) 1, 2, 3 & 4.
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Reuben
5 days ago
Hmm, I'm not sure. 0.8 elasticity means supply is somewhat responsive to price changes. I guess C could be right, but I'm not convinced that producer incomes will necessarily rise. Guess I better brush up on my economics before the exam.
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Leonardo
8 days ago
I think the answer is C) 1 & 4 only.
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Maxima
9 days ago
Well, this seems straightforward. With a price elasticity of supply of 0.8, I'd say option C is the correct answer. Price will rise more than proportionately, and more will be spent on the good. Sounds like a win-win for the producers!
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