Chapter 3

Question 1

A new government comes into power in Canada promising to reduce the number of laws affecting business activity. In other words, this new government is in favour of ________.

Answer 1

deregulation

Question 2

While visiting a farmer’s market in a major city in Canada, you may find many vendors selling identical apples (possibly from the same town or even the same orchard). How would you describe this form of competition?

Answer 2

Perfect competition

Question 3

Mona was was hired by an oil company in Alberta to represent their vital interests with government officials. Mona would be characterized as a ________.

Answer 3

lobbyist

Question 4

The government of Canada imposes many different types of taxes. Which of the following is the best example of a regressive revenue tax?

Answer 4

Sales tax (GST, HST)

Question 5

What is the law of demand?

Answer 5

The principle that buyers will purchase more of a product as price drops.

Question 6

What is privatization?

Answer 6

The transfer of activities from the government to the private sector.

Question 7

What is the government’s role as a regulator?

Answer 7

Federal and provincial governments in Canada control and legislate many aspects of business activity through administrative boards, tribunals, and commissions.

Question 8

_________ is a planned economic system in which the government owns and operates only selected major sources of production.

Answer 8

Socialism

Question 9

What situations describes the market price?

Answer 9

When the quantity of goods demanded matches the quantity of goods supplied

Question 10

What is the situation when the quantity of goods demanded matches the quantity of goods supplied?

Answer 10

Market price

Question 11

________ is the difference between a business’s revenues and its expenses

Answer 11

Profit

Question 12

Most countries in the world would be characterized as___________.

Answer 12

mixed market economies

Question 13

What is shown on a supply-curve graph?

Answer 13

How much of a product will be for sale at different prices

Question 14

In a ________, business-to-consumer (B2C) and business-to-business (B2B) exchanges take place without much government involvement.

Answer 14

market economy

Question 15

The government controls the factors of production in Country X and makes the major production decisions in the economy. This is an example of a ________.

Answer 15

command economy

Question 16

The key difference between economic systems is the way in which they manage labour, capital, entrepreneurs, natural resources, and information. Collectively these basic resources are known as the _________.

Answer 16

factors of production

Question 17

What is socialism?

Answer 17

A system in which the government owns and operates only selected major sources of production and private ownership of smaller businesses is permitted

Question 18

A(n) ___________ is an organization dedicated to promoting the interests and assisting the members of a particular industry.

Answer 18

trade association

Question 19

What is the Competition Act?

Answer 19

Laws prohibiting a variety of business practices that lessen competition.

Question 20

What is the input market?

Answer 20

Firms buy resources that they need in the production of goods and services.

Question 21

The retail gas station industry in Canada is dominated by a handful of powerful sellers. This is an example of a(n) _________.

Answer 21

oligopoly

Question 22

In some industries, domestic production quotas are established for commodities such as dairy products, maple syrup, eggs, chickens, and turkeys. Producers are not allowed to produce more than the quota they have been granted. This is known as ________.

Answer 22

supply management

Question 23

What is capitalism?

Answer 23

An economic system in which markets decide what, when, and for whom to produce.

Question 24

Labour unions and government agencies are good examples of ________.

Answer 24

not-for-profit organizations

Question 25

To finance a new business and sustain that business throughout its life, companies need_________.

Answer 25

Capital

Question 26

What is a monopoly?

Answer 26

A market or industry in which there is only one producer that can singularly control the prices of its products

Question 27

What is communism?

Answer 27

A political system in which the government owns and operates all factors of production

Question 28

``` A business is an organization that seeks to earn​ ______ by providing​ ______. A. ​revenue; goods,​ services, and ideas B. ​profit; goods and services C. ​revenue; sales D. ​profit; revenue ```

Answer 28

​profit; goods and services

Question 29

``` The way in which a nation allocates its resources among its citizens is determined by its​ _______________. A. economic system B. factors of production C. fiscal policy D. social policy ```

Answer 29

economic system

Question 30

``` The Canadian​ Radio-television and Telecommunications Commission is a​ ______. A. federal department B. type of law court C. provincial corporation D. regulatory agency E. Crown corporation ```

Answer 30

regulatory agency

Question 31

``` The Food and Drug Act is an example of a piece of legislation that​ ______. A. protects consumers B. protects businesses C. promotes competition D. protects the environment E. achieves social goals ```

Answer 31

protects consumers

Question 32

``` ______ is a mechanism for exchange between buyers and sellers. A. A market B. An output market C. A mixed economy D. Capitalism E. An input market ```

Answer 32

A market

Question 33

``` An economic system characterized by private property​ rights, freedom of​ choice, profits, and competition is best described as​ __________________. A. open economy B. mixed economy C. socialism D. private enterprise E. communism ```

Answer 33

private enterprise

Question 34

``` Canadian agriculture provides a good example of an industry in which there exists​ ________. A. perfect competition B. a monopoly C. an oligopoly D. a natural monopoly E. monopolistic competition ```

Answer 34

perfect competition

Question 35

Market equilibrium is determined by the​ _________. A. intersection of the demand curve and the horizontal ​ (quantity) axis B. demand curve alone C. supply curve alone D. intersection of the supply curve and the vertical​ (price) axis E. intersection of the demand curve and the supply curve

Answer 35

intersection of the demand curve and the supply curve

Question 36

``` To produce cars and​ trucks, General Motors had to manage the factors of production. Predicting consumer demand and adjusting production is an example of​ _____. A. labour B. capital C. physical resources D. information resources ```

Answer 36

information resources

Question 37

``` The term​ ______ refers to the willingness of buyers to purchase a good or service. A. demand B. surplus C. shortage D. supply E. equilibrium ```

Answer 37

demand