# Thread: FREE CFA Level 1 sample questions everyday for December 2010 candidates

1. Originally Posted by optimisticAL
Thx anita123.
Are you appearing for L1 this dec?
Most probably but did not register yet.

2. Are you from Finance background?

3. Q#8 Answer: (A) Technological efficiency occurs when the least number of input units are used to produce a given level of output. Economic efficiency occurs when a given output is produced at the lowest possible cost.
Option C is incorrect. While an economically efficient production method must also be technologically efficient, it is not necessary for a technologically efficient method to be economically efficient.
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Today's question (Questions and answers provided by Elan Guides)

Q#9: When marginal product (MP) is at its maximum, it is most likely that:

A. Average product intersects it from above.
B. Average variable cost is at its minimum.
C. Marginal cost is at its minimum.
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4. I think it's B.

5. I think its C.
Anyone needs explanation, plz let me know.

6. Originally Posted by optimisticAL
I think its C.
Anyone needs explanation, plz let me know.
Could you pls explain?

Naveen

7. Q#9 Answer: (C) Marginal product is at its maximum when marginal cost is at its minimum.
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Today's question (Questions and answers provided by Elan Guides)

Q#10: Which of the following most accurately describes the relationship between marginal product (MP) and average product (AP)?

As the quantity of labor increases:

A. Initially MP exceeds AP, and later AP exceeds MP.
B. Initially AP exceeds MP, and later MP exceeds AP.
C. MP intersects AP from above through its minimum point.
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8. Yes I figured that CFA likes certain things in a certain way..It is like you might know how to drive really well but it does not mean yu will pass the driving test as they prefer certain things in certain way..

So what is the certain way and for the benefit of anyone who was not bale to arrive at 104.24 as the answers ..Here are the numbers

Solve -1.2 = % change in demand/ % change in price

Numerator is : [(Y-150)/ ((150+Y)/2)]

Denominator is: 0.3

solve it and you will get the answer..I hope this helps..

Originally Posted by Shailesh Otari
Clarification regarding Q#2....
The original Q was
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Q#2. A good has a price elasticity of demand of 1.2. In response to an increase in price of 30%, quantity demanded will change from 150 units to:

A. 104.24
B. 195.76
C. 96
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We provided the answer as (C). (See the explanation by Shivaramkrishnan Iyer for this)... However, Elan Guides, who is our content partner, differed. As per the above post by Anshul, the CFA exam expects candidates to do this calculation in a certain way and as per that method, the answer is (A).

Team DG and Elan Guides were in discussion regarding which answer is correct and the post by Anshul clears the confusion. While our answer was conceptually correct, we encourage the students to kindly follow the CFA method.

I hope this clears any doubts in the reader's mind.

9. Originally Posted by Shivramakrishnan Iyer
Yes I figured that CFA likes certain things in a certain way..It is like you might know how to drive really well but it does not mean yu will pass the driving test as they prefer certain things in certain way..

So what is the certain way and for the benefit of anyone who was not bale to arrive at 104.24 as the answers ..Here are the numbers

Solve -1.2 = % change in demand/ % change in price

Numerator is : [(Y-150)/ ((150+Y)/2)]

Denominator is: 0.3

solve it and you will get the answer..I hope this helps..
It's good that we discussed this question in detail. Though it was not very tough, we can see that we need to be careful and learn the CFA way of solving the problems.

10. Originally Posted by Shailesh Otari
Q#9 Answer: (C) Marginal product is at its maximum when marginal cost is at its minimum.
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Today's question (Questions and answers provided by Elan Guides)

Q#10: Which of the following most accurately describes the relationship between marginal product (MP) and average product (AP)?

As the quantity of labor increases:

A. Initially MP exceeds AP, and later AP exceeds MP.
B. Initially AP exceeds MP, and later MP exceeds AP.
C. MP interesects AP from above through its minimum point.
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