Deck 2: Economic Environment

Question 1

Which type of economy is based on competition in the marketplace and private ownership of the factors of production?

A) command economy
B) planned economy
C) market economy
D) mixed economy

Answer 1

C

Question 2

Which type of economy does Canada have?

A) mixed economy
B) market economy
C) planned economy
D) command economy

Answer 2

A

Question 3

A country's government combines laws and policies and makes choices to establish the systems that determine what goods and services are produced and how they are allocated. This is referred to as which of the following?

A) macroeconomics
B) industrial policy
C) political system
D) economic system

Answer 3

D

Question 4

What is the definition of microeconomics?

A) monetary policy as it pertains to specific industries
B) fiscal and monetary policy on a national level
C) the interactions of aggregated national and international economic data
D) individual companies, markets, or households

Question 5

Which is an example of a factor of production?

A) corporate social responsibility
B) business ethics
C) entrepreneurship
D) the economic climate

Question 6

What is the definition of macroeconomics?

A) changes in resource availability in the marketplace
B) the economy as a whole through looking at aggregate data
C) the activities of individual companies and products
D) the supply and demand of individual households

Question 7

Which one characteristic most clearly defines a market structure?

A) the number of suppliers in a market
B) the market share
C) the type of product sold
D) how the company is organized

Question 8

The relationship of the inputs and outputs of households, businesses, and governments can be graphically explained through the use of which figure?

A) diamond
B) box
C) circle
D) square

Question 9

The agricultural sector in Guatemala accounts for about one-quarter of the nation's GDP, two-thirds of its exports, and half of its labour force. This type of information would be revealed through which perspective?

A) regional monetary policy
B) aggregated economics
C) area economics
D) microeconomics

Question 10

Which of the following is an example of a factor of production?

A) natural resources
B) government
C) charities
D) the economy

Question 11

To examine how the sectors of the economy interact, you should think in terms of which of the following figures?

A) diamond shape
B) linear graph
C) economic hierarchy
D) circular flow

Question 12

The state of the economy affects which two groups?

A) people and businesses
B) people and communities
C) provinces and businesses
D) municipalities and nonprofits

Question 13

In Canada, which of the following two items work together to guide the economy?

A) the Bank of Canada and the socialist system
B) the stock markets and the mixed economic system
C) the government and the free-market system
D) the department of finance and the global economic system

Question 14

The GMC manager who evaluates truck models made by his competition, consumer demand for different sizes of trucks, labour and material costs to build trucks, and current prices of all trucks would be taking which of the following perspectives?

A) microeconomics
B) individual economics
C) aggregated economics
D) macroeconomics

Question 15

Which of the following is the study of the economy as a whole, looking at aggregate data for large groups of people, companies, or products?

A) economics aggregation
B) national economics
C) microeconomics
D) macroeconomics

Question 16

Which of the following is the study of how a society uses scarce resources to produce and distribute goods and services?

A) finance
B) acculturation
C) economics
D) marketing

Question 17

An individual who is thinking of buying a Wendy's franchise in London, Ontario, and is examining the employment statistics, area income levels, and local competition would be interested in which of the following fields?

A) regional monetary policy
B) macroeconomics
C) area economics
D) microeconomics

Question 18

A manager in the life insurance industry examining the national level of personal income, the unemployment rate, interest rates, inflation, and death statistics would be looking at which of her company's environments?

A) microeconomic
B) macroeconomic
C) national economic
D) competitive

Question 19

The combined talents, skills and capabilities of individuals in the workforce is which factor of production?

A) knowledge
B) capital
C) entrepreneurship
D) labour

Question 20

In what type of economy does the government own almost all the resources and economic decision making is centralized?

A) command economy
B) planned economy
C) market economy
D) mixed economy

Question 21

Southern Ontario farmers have found it difficult to go into olive farming because olives imported from Europe are priced so much cheaper. Canadian farmers have to meet various climate challenges to grow olives and thus have higher expenses. Consumers prefer to buy the lower-priced imported olives rather than locally grown olives. The problems that make it unprofitable for an Ontario farmer to profitably become an olive farmer would be considered which of the following?

A) a purchasing power equalizer
B) a market contractionary tool
C) an oligopolistic tool
D) a barrier to entry

Question 22

An industry in which a few companies produce most or all of the output of a product and in which large amounts of capital are needed is known as which of the following?

A) perfect competition
B) an oligopoly
C) monopolistic competition
D) imperfect competition

Question 23

Which of the following statements about demand and supply accurately describes the direction one of the curves will take if one variable is altered?

A) The supply curve will shift to the left if taxes are decreased.
B) The demand curve will shift to the left if buyers' incomes increase.
C) The demand curve will shift to the right if the number of buyers decreases.
D) The supply curve will shift to the left if the number of suppliers increases.

Question 24

Which of the following statements describes an oligopoly?

A) In an oligopoly, three or four companies usually dominate the marketplace.
B) In an oligopoly, there are many companies selling identical products.
C) In an oligopoly, prices between companies are very different.
D) In an oligopoly, there are usually one or two companies that dominate the market.

Question 25

Which direction represents the slope of the demand curve?

A) horizontal
B) upward and to the right
C) downward and to the left
D) downward and to the right

Question 26

In a large metropolitan market, it is relatively easy to set up a law office. The ease of entry explains why you will find hundreds of lawyers listed in the Toronto phone book. Each lawyer is a close substitute for another but with slight differences. Which of the following market structures best describes the one in which lawyers operate?

A) monopolistic competition
B) pure competition
C) oligopoly
D) perfect monopoly

Question 27

Which of the following statements best describes how equilibrium varies?

A) At prices below equilibrium, demand exceeds supply.
B) Government intervention is usually needed to achieve market equilibrium.
C) At prices above equilibrium, suppliers produce less than consumers are willing to buy.
D) A surplus of product pushes prices above equilibrium.

Question 28

In perfect competition, which of the following conditions exists?

A) only one producer
B) no relationship between supply and demand
C) a large number of buyers and few sellers
D) a large number of sellers producing nearly identical products

Question 29

When a single company accounts for 100 percent of industry sales, it is an example of which type of market structure?

A) a pure monopoly
B) an oligopoly
C) monopolistic competition
D) imperfect competition

Question 30

Which of the following terms refers to a market in which there are a large number of companies that differentiate their products?

A) an oligopoly
B) oligopolistic competition
C) perfect competition
D) monopolistic competition

Question 31

Which concept represents the quantity of a good or service that people are willing to buy at various prices?

A) demand
B) market potential
C) supply
D) market share

Question 32

If NBPower supplies all of the electricity to New Brunswick, NBPower is an example of which of the following?

A) an oligopolistic monopoly
B) monopolistic competition
C) an oligopoly
D) a pure monopoly

Question 33

For a time, only Xerox could produce dry-paper copiers because Xerox held all the patents on the process. Until the patents expire, Xerox could be said to operate in which type of market structure?

A) monopolistic competition
B) perfect competitive
C) pure monopoly
D) oligopoly

Question 34

In the middle of the mountains in northern BC, there are five service stations competing for all the business that exists in this isolated location. When one service station lowers its price on gas, all must follow suit. These service stations are operating in which type of market structure?

A) oligopoly
B) monopoly
C) perfect competition
D) imperfect competition

Question 35

In which type of market structure can few sellers exert substantial control over prices?

A) monopolistic competition
B) oligopoly
C) perfect monopoly
D) pure monopoly

Question 36

Which of the following directions describe the slope of the supply curve?

A) downward and to the left
B) upward and to the right
C) horizontal
D) downward and to the right

Question 37

There is a large capital requirement needed to set up a tire manufacturing operation. What type of market structure do tire manufacturers operate in?

A) perfect competition
B) oligopoly
C) imperfect competition
D) monopolistic competition

Question 38

Which of the following terms refers to the quantity of a product or service that businesses will make available at various prices?

A) demand
B) market potential
C) supply
D) capacity

Question 39

Think about all the restaurants that are located near your campus. You have probably noted some new ones appearing, and others closing because of lack of business. What type of competition exists in the restaurant business?

A) monopolistic competition
B) oligopolistic competition
C) an oligopoly
D) perfect competition

Question 40

For most agricultural products, farmers produce homogeneous products, sell them to a common market, and generally cannot affect prices greatly. This is an example of which kind of market structure?

A) a pure monopoly
B) imperfect competition
C) perfect competition
D) monopolistic competition

Question 41

Which type of GDP takes inflation into account and uses adjusted market prices?

A) real
B) frictional
C) adjusted
D) cyclical

Question 42

If the national unemployment rate goes up, which of the following might be a contributing factor?

A) Some people took a job transfer to another province.
B) Some people took a job right out of high school.
C) Some people are preparing for later employment by attending school.
D) Some people started a new job and their old position is vacant.

Question 43

Market equilibrium is described as which of the following?

A) the point at which a nation reaches full employment
B) the time period used to determine the Consumer Price Index (CPI)
C) the point at which quantity supplied equals quantity demanded
D) the moment when profit is created

Question 44

What is the name of the business cycle that follows a recession?

A) upsizing
B) prosperity
C) inflation
D) recovery

Question 45

Within a country's borders each year, the sum market value of all final goods and services produced is referred to as which of the following?

A) gross domestic product
B) producer price index
C) consumer price index
D) gross national product (GNP)

Question 46

Imagine that you were reading an international marketing text in which you learned that the GDP for one of the former members of the Soviet Union was $1.56 billion. A few pages later in the same text, the book states that that nation's real GDP was $800,000. From reading this information, what could you conclude?

A) The second GDP measurement reflected only the value of the products produced in the nation and did not include the value of services.
B) The various methods used to calculate GDP do not produce the same results.
C) GDP is an approximation of the actual total value.
D) This former member of the Soviet Union had a high rate of inflation.

Question 47

Which of the following is the most basic measure of economic growth?

A) consumer price index
B) producer price index
C) gross domestic product
D) total of all goods and services produced

Question 48

What are patterns of expansion and contraction in aggregate economic activity, as measured by GDP?

A) business standards
B) cyclical adjustments
C) economic yields
D) business cycles

Question 49

Assume the GDP in Argentina increased by 28 percent in 2010. The economists would adjust the current market prices to take into account inflated values. This adjusted GDP is which type of the nation's GDP?

A) real
B) frictional
C) interpreted
D) cyclical

Question 50

If you were told the output of goods and services produced in Luxembourg had increased by 6 percent in 2010, you would correctly refer to this increase as which type of growth?

A) an example of recessionary growth
B) growth standardization
C) economic growth
D) nationalized growth

Question 51

Josh Loachim quit his job in advertising in Toronto and moved to Calgary, where he is actively seeking employment. This is an example of which type of unemployment?

A) frictional
B) fiscal
C) structural
D) cyclical

Question 52

The unemployment rate is the percentage of the total workforce that is not working but is engaged in which of the following activities?

A) drawing unemployment cheques
B) preparing physically and mentally to begin work
C) actively looking for work
D) laid off, terminated, or downsized due to some economic activity outside their control

Question 53

If, in 2010, 7.5 percent of a country's total workforce was not working, but was actively seeking employment, which national figure does this 7.5 percent represent?

A) recessionary unemployment
B) unemployment rate
C) inflationary unemployment
D) position on the international unemployment scale

Question 54

What is a decline in real GDP for at least two consecutive quarters?

A) economic downsizing
B) recession
C) depression
D) resource divestment

Question 55

When demand and supply meet, the price of the product or service is established. What is this point called?

A) equilibrium
B) interaction
C) price intersection
D) monetary value

Question 56

If the GDP of a country in 2010 was $48 billion, what does this $48 billion represent?

A) the total value of all final goods and services produced during 2010
B) the actual growth of discretionary profit in 2010
C) the estimated growth of discretionary profit in the country for 2010
D) how much money the households in the country spent in 2010

Question 57

Which of the following is a form of unemployment?

A) unseasonal unemployment
B) fractional unemployment
C) cyclical unemployment
D) fiscal unemployment

Question 58

Full employment is having jobs for all who want to work and can work. Full employment is never 100% but is defined by the government as which percentage?

A) 90-92%
B) 92-94%
C) 94-96%
D) 97-99%

Question 59

Which type of unemployment is related to the ups and downs of the economy?

A) structural unemployment
B) frictional unemployment
C) cyclical unemployment
D) seasonal unemployment

Question 60

As soon as Kazakhstan, a former member of the Soviet Union, had experienced two consecutive quarterly declines in its gross national product, Kazakhstan was in which economic situation?

A) regression
B) recession
C) adjustment period
D) depression

Question 61

Structural unemployment is unemployment that results from which of the following circumstances?

A) the restructuring of an organization
B) the change in business cycles
C) a mismatch between the available jobs and the skills of available workers
D) people moving to new geographical areas

Question 62

What is a general upward movement of prices in the economy?

A) purchase power acceleration
B) deflation
C) inflation
D) upsizing

Question 63

Which type of inflation is triggered by increases in production that push up the costs of final goods and services?

A) supply-side
B) demand-push
C) cost-push
D) demand-side

Question 64

In PEI, jobs are plentiful during the summer months, but difficult to find in September once the tourists leave and many restaurants and inns close. People who work in the island's restaurants annually become unemployed in which way?

A) structurally
B) geographically
C) frictionally
D) seasonally

Question 65

If the tourism industry in a Canadian province had 43 percent unemployment due to an economic downturn that gripped the country, the workers in the tourism industry would be experiencing which of the following type of unemployment?

A) seasonal
B) cyclical
C) structural
D) frictional

Question 66

If one of the reasons for the growing inflation rate is due to increases in production costs of goods and services that occurred as a result of a decline in a suitable labour force, this would be an example of which type of inflation?

A) cost-push
B) supply-side
C) cost-pull
D) demand-push

Question 67

Which of the following represent two types of inflation?

A) demand-pull and cost-push
B) cost-pull and supply-push
C) demand-pull and supply-push
D) recessionary and recovery

Question 68

Laron Kelly recently quit his job as a car salesperson and is now trying to find a job with another car dealership. This is an example of which type of unemployment?

A) structural
B) frictional
C) recessionary
D) fiscal

Question 69

Each January, Lopez is laid off as soon as Christmas is over. She will be hired back sometime during the summer. In terms of unemployment, Lopez is a good example of which type of unemployment?

A) frictional
B) structural
C) seasonal
D) fiscal

Question 70

Last year, a mother in a small African nation could buy a pound of flour for the Canadian equivalent of $1.30. Six months ago, an identical pound of flour cost $3.40. Today she would need $5.60 to buy that pound of flour. What is the term for this example of the general upward movement of prices?

A) discretionary pricing
B) supply-side pricing
C) deflation
D) inflation

Question 71

When the economy is in a recession, many companies must lay off workers, causing which type of unemployment?

A) cultural
B) cyclical
C) frictional
D) structural

Question 72

The price of a basket of groceries rises from $30 to $40 but your salary remains the same. This is an example of a decline in which of the following for you, personally?

A) standard of living
B) purchasing power
C) cost of living index
D) GDP index

Question 73

Suppose that 50 percent of the labour force in a country is involved in the agricultural sector, but the economic growth in the nation comes from industry and tourism. What type of unemployment would such a mismatch of ability and job requirements cause?

A) mechanical
B) frictional
C) structural
D) cyclical

Question 74

The price of a decorated three-tiered wedding cake from a local supermarket deli recently increased from $105 to $119. The supermarket manager said it was due entirely to increases in sugar and labour costs. The $14 increase is an example of which of the following?

A) deflation
B) poor resource utility
C) price gouging
D) inflation

Question 75

For the past 10 years, Kris Boja has been a welder for a local manufacturer. This morning her boss informed her that a robot would replace her. Boja's unemployment is an example of which type of unemployment?

A) cyclical
B) mechanical
C) structural
D) frictional

Question 76

What does it mean if the annual inflation rate in a country was 8.1 percent?

A) The people experienced demand-push inflation.
B) The people saw a decline in gross domestic product (GDP).
C) The people saw their purchasing power increase from what it was in the previous year.
D) The people saw their purchasing power decrease from what it was in the previous year.

Question 77

Gracie Burlesford works for a peach grower in southern Ontario. In July, Burlesford was laid off because of a drought. What type of unemployment is this?

A) frictional
B) structural
C) geographical
D) seasonal

Question 78

If a nation experienced an inflation rate of about 12 percent and then, 5 years later, had an inflation rate of about 15 percent, which of the following statements best describes what was happening to purchasing power during that period?

A) The purchasing power of businesses did not see a change throughout the period, but consumers did.
B) The average consumer's purchasing power was lower at the beginning of period than at the end.
C) The country was experiencing a recession, prices were universally high throughout the period, and purchasing power declined for everyone.
D) The average consumer's purchasing power was higher at the beginning of the period than at the end.

Question 79

The labourers displaced due to assembly-line automation may not have the skills needed to operate the computerized machines that replaced them. This is an example of which type of unemployment?

A) cyclical
B) operational
C) frictional
D) structural

Question 80

Which type of inflation occurs when the demand for goods and services is greater than the supply?

A) demand-push
B) cost-push
C) demand-pull
D) supply-side