Question 1

During 2019, Luxury Jewellery Inc. had sales revenues of $1,500,000. This retailer also had expenses that totalled $800,000. What is the firm's profit or loss amount?

Accepted Answer

A)  $2,300,000 
B)  $1,500,000 
C)  $800,000 
D)  $700,000

Question 2

If the GDP has decreased in the last two years, which of the following is likely true?

Accepted Answer

A)  The economy is in a recession and unemployment rate is decreasing. 
B)  The economy is in a recession and the unemployment rate is increasing. 
C)  The economy is in a recovery phase and the unemployment rate is decreasing. 
D)  The economy is in a contraction phase and the CPI is decreasing.

Question 3

Which of the following industries would most likely have the characteristics of an oligopoly?

Accepted Answer

A)  clothing 
B)  automobiles 
C)  cameras 
D)  makeup

Question 4

The price of gasoline increases by $1 per litre. What is the most likely impact on supply and demand?

Accepted Answer

A)  demand down, supply down 
B)  demand up, supply up 
C)  demand down, supply up 
D)  demand up, supply down

Question 5

The vast majority of businesses in Canada have approximately how many employees?

Accepted Answer

A)  100-200 
B)  200-500 
C)  fewer than 100 
D)  more than 500

Question 6

Canadian businesses contribute to communities in many different ways. Which of the following is NOT one of those ways?

Accepted Answer

A)  paying taxes 
B)  providing employment 
C)  charitable giving 
D)  raising the standard of living

Question 7

Which of the following scenarios most accurately describes Adam Smith's view of an economic system that best serves the interests of society?

Accepted Answer

A)  Individuals are selected to fill certain positions within the economy of their nation according to the needs of the nation as a whole. 
B)  Markets are carefully regulated to ensure that all individuals within a nation are treated fairly and charged standardized prices. 
C)  Government scarcely exists in this country, and transactions are based on a system of barter, or trading goods for other goods. 
D)  Individuals in the country may pursue their own economic gain and self-interest by doing whatever is best for them.

Question 8

Perfect competition is characterized by which of the following?

Accepted Answer

A)  many buyers and many sellers 
B)  few buyers and few sellers 
C)  few buyers and many sellers 
D)  a few companies that control the market

Question 9

As the price of pencils decreases, what are the manufacturers that make and sell pencils likely to do?

Accepted Answer

A)  do nothing to influence the available supply of pencils 
B)  decrease production and thus decrease the supply 
C)  increase production to influence the demand for pencils 
D)  switch from producing pencils to producing pens

Question 10

Which of the following best demonstrates how studying business can help improve your career?

Accepted Answer

A)  you learn about financial management and analysis 
B)  you learn about the environmental and social impacts of a business 
C)  you learn about business and management best practices 
D)  you learn about how businesses create products

Question 11

Merck, a global pharmaceutical company, donates its pharmaceuticals and vaccines in support of disaster relief and emergency situations worldwide through the Merck Medical Outreach Program (MMOP). This is an example of providing which benefit to society?

Accepted Answer

A)  paying taxes 
B)  contributing to economic growth 
C)  providing employment 
D)  charitable giving

Question 12

If you have trouble finding a job because the majority of businesses have falling revenues and profits, you are being impacted by what factor of the business environment?

Accepted Answer

A)  economic 
B)  competitive 
C)  global 
D)  employment

Question 13

Which of the following best describes deflation?

Accepted Answer

A)  a sign of economic health 
B)  scheduled by the nation's economists to make economic corrections 
C)  a general decrease in the level of prices 
D)  a decrease in the size of GDP for two quarters or more

Question 14

An increase in marketing to different ethnic groups of consumers and an expected increase in education spending in Canada are examples of how which type of factors are impacting the business environment?

Accepted Answer

A)  language 
B)  social 
C)  cultural 
D)  financial

Question 15

Exxon Mobil and Shell are two of the relatively few sellers in the oil-refining industry. Due to the tremendous capital investment required to enter this industry, these companies are insulated significantly from the threat of new competitive entrants and thus have considerable control over price. What is this market situation referred to as?

Accepted Answer

A)  a cartel 
B)  a pure market 
C)  a natural monopoly 
D)  an oligopoly

Question 16

The lawyer for a group of workers at a meat packing plant holds a news conference to discuss the high rate of injury experienced by these workers. This highlights which potential concern about the impact of business on society?

Accepted Answer

A)  environmental damage 
B)  offering products that aren't valuable 
C)  health and safety risks 
D)  poor quality of life in the community

Question 17

The nationalization of key industries in countries such as Sweden and France is indicative of which type of economy?

Accepted Answer

A)  socialist 
B)  communist 
C)  capitalist 
D)  nationalist

Question 18

Amazon is now one of the top retailers in Canada, even though it does not have any substantial physical retail presence. This illustrates the impact of which type of factors in the business environment?

Accepted Answer

A)  economic 
B)  technology 
C)  competitive 
D)  global

Question 19

The Dairy Diner's profits are down from the previous quarter. Which of the following would NOT be an explanation for the decrease in profits?

Accepted Answer

A)  sales revenues stayed the same while expenses decreased 
B)  sales revenues stayed the same while expenses increased 
C)  sales revenues decreased while expenses stayed the same 
D)  sales revenues were less than expenses

Question 20

According to Adam Smith, what should be the role of government in a capitalistic society?

Accepted Answer

A)  collective ownership of land and resources, distribution of goods and pay according to work done and owner of industries 
B)  to redistribute wealth by taxing the private sector, promote social objectives, and centrally plan the economy 
C)  limited to providing defence against foreign enemies, ensuring internal order, and furnishing public works and education 
D)  controlling interest in industry, distribution of resources, and promoting social objectives

Exam 1: Exploring the World of Business and Economics