CFA CFA Level 1 CFA Level 1 Question of the Week: Economics

CFA Level 1 Question of the Week: Economics

  • This topic has 7 replies, 6 voices, and was last updated Oct-18 by Swati.
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    • exam_whiz
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      Which of the following statements relating to obstacles to efficient allocation of resources is/are most likely incorrect?

      I:   Price ceilings set below the equilibrium price lead to shortages, bribery, poor quality and black marketeering.

      II:  Subsidies decrease equilibrium quantities and lead to dead weight losses from overproduction.

      III: Production quotas decrease equilibrium quantities and lead to dead weight losses from underproduction.

      • Both statements I and II
      • Both statements I and III
      • Only statement II
    • jmsatchwell
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      Ugh I hate when I check the wrong box. That’s gonna trip me up more than anything in December.

    • christine
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      @jmsatchwell‌ hopefully this helps you just that little extra to get it right in the actual exam!

    • exam_whiz
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      Correct Answer:  C

      Subsidies result in ‘increase’ in equilibrium quantities and lead to dead-weight losses from overproduction. Statement II is incorrect. The remaining two statements are correct.

    • exam_whiz
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      I had that same problem taking exams @jmsatchwell‌ !  If I had time at the end of the exam I would always double check to make my answers matched what I meant to put.  Most people probably don’t need to do that, but for me it was well worth the time!

    • shannondaily
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      Woo! I got it right. 

    • chenbowen
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      incorrect :/ I checked the correct ones uhhh

    • Swati
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      Uggh … I again didn’t read the word incorrect … Checked correct ones

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