Chapter 1 2 Bob owns the St. Paul Street one-stop convenience store

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

82. Bob owns the St. Paul Street one-stop convenience store, one of 300 convenience stores in his

region. Which degree of competition is Bob involved in?

a. Monopolistic competition

b. Oligopoly

c. Perfect competition

d. Oligopolistic competition

e. Monopoly

Difficulty: 2 Page-Reference: 22

Question ID: 01-1-82 Skill: Application

Objective: 1.4

83. In a market with perfect competition

a. buyers and sellers do not know the price structure of the market.

b. price is set by supply and demand.

c. there are very few sellers.

d. firms are relatively large.

e. products have very few similarities.

Difficulty: 2 Page-Reference: 22

Question ID: 01-1-83 Skill: Knowledge

Objective: 1.4

84. Which one of the following is the best example of perfect competition?

a. Agricultural industry

b. Automobile industry

c. Utility industry

d. Clothing industry

e. Soft drink industry

Difficulty: 2 Page-Reference: 22

Question ID: 01-1-84 Skill: Comprehension

Objective: 1.4

85. Boeing, a manufacturer of large commercial aircraft, raises its prices by 9 percent. Airbus, another

manufacturer of large commercial aircraft, follows with an increase of 9.5 percent. Each of these

companies is practicing a type of pricing strategy characteristic of

a. controlled competition.

b. monopolistic competition.

c. an oligopoly.

d. perfect competition.

e. a monopoly.

Difficulty: 3 Page-Reference: 22

Question ID: 01-1-85 Skill: Comprehension

Objective: 1.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

86. Competition like that between Tide and Cheer, or Coke and Pepsi, is

a. oligopolistic competition.

b. monopolistic competition.

c. oligopoly.

d. perfect competition.

e. monopoly.

Difficulty: 2 Page-Reference: 22

Question ID: 01-1-86 Skill: Comprehension

Objective: 1.4

87. Which of the following businesses has a natural monopoly?

a. A provincial electric company

b. Via Rail

c. A Chapters bookstore

d. Pepsi

e. De Beers Diamonds

Difficulty: 2 Page-Reference: 23

Question ID: 01-1-87 Skill: Comprehension

Objective: 1.4

88. Bailey Wear manufactures children’s clothing. The company is able to set its prices higher than its

competitors because of the fine material it uses and the attention it pays to the quality of the sewing.

Bailey Wear is operating in a competitive environment of

a. monopolistic competition.

b. perfect competition.

c. oligopolistic competition.

d. oligopoly.

e. monopoly.

Difficulty: 2 Page-Reference: 22

Question ID: 01-1-88 Skill: Comprehension

Objective: 1.4

89. Which of the following is correct regarding monopolistic competition?

a. There are many competitors in the industry.

b. Products are differentiated.

c. Competitors can enter and leave the market easily.

d. Competitors may be large or small.

e. All of these statements are correct.

Difficulty: 3 Page-Reference: 22

Question ID: 01-1-89 Skill: Knowledge

Objective: 1.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

90. Which of the following is correct regarding monopolistic competition?

a. Prices are similar but products can be differentiated.

b. Prices and products are very similar.

c. Both products and prices differ from one competitor to the next.

d. Prices vary from one competitor to the next, but products are very similar.

e. None of these

Difficulty: 3 Page-Reference: 22

Question ID: 01-1-90 Skill: Knowledge

Objective: 1.4

91. Which of the following is the best definition of an oligopoly?

a. An industry with only one buyer, but many sellers

b. An industry with many buyers and many sellers; sellers have no control over price

c. An industry with many buyers, but only one seller

d. An industry with only a handful of sellers, most of which are large

e. An industry with many buyers and many sellers; sellers have some control over price

Difficulty: 2 Page-Reference: 22

Question ID: 01-1-91 Skill: Knowledge

Objective: 1.4

92. The airline, automobile, and steel industries illustrate what type of competition?

a. oligopoly

b. free market enterprise

c. monopolistic competition

d. monopoly

e. perfect competition

Difficulty: 2 Page-Reference: 22

Question ID: 01-1-92 Skill: Comprehension

Objective: 1.4

93. A motive to start a business is ________, while ________ creates the need to run the business

efficiently.

a. profit; government

b. money; government

c. profit; pride

d. profit; competition

e. competition; profit

Difficulty: 2 Page-Reference: 21

Question ID: 01-1-93 Skill: Comprehension

Objective: 1.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

94. Individual ownership of property is a key element in

a. the private enterprise system.

b. a planned economy.

c. socialism.

d. the factors of production.

e. communism.

Difficulty: 2 Page-Reference: 21

Question ID: 01-1-94 Skill: Knowledge

Objective: 1.4

95. What provides the motivation for an entrepreneur to operate his or her business efficiently?

a. The right to vote

b. Private property rights

c. Competition

d. Privatization

e. Freedom of choice

Difficulty: 1 Page-Reference: 22

Question ID: 01-1-95 Skill: Knowledge

Objective: 1.4

96. Computers B Us is a manufacturer of customized microcomputers. They are able to set their

prices higher than competitors because they can assemble a computer to a customer’s exact

specifications. Computers B Us is operating in a competitive environment of

a. oligopolistic competition.

b. perfect competition.

c. monopolistic competition.

d. monopoly.

e. oligopoly.

Difficulty: 2 Page-Reference: 22

Question ID: 01-1-96 Skill: Comprehension

Objective: 1.4

97. A situation where there are many buyers, a lot of product differentiation, and relative ease of entry

or exit of the market is known as

a. oligopolistic competition.

b. monopoly.

c. pure competition.

d. monopolistic competition.

e. oligopoly.

Difficulty: 2 Page-Reference: 22

Question ID: 01-1-97 Skill: Knowledge

Objective: 1.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

98. Harcourt Corporation is one of only five firms that make and distribute playground equipment.

This illustrates which degree of competition?

a. Monopolistic competition

b. Pure competition

c. Oligopoly

d. Monopoly

e. Selective competition

Difficulty: 2 Page-Reference: 22

Question ID: 01-1-98 Skill: Comprehension

Objective: 1.4

99. The Gap makes their products appear to be slightly different from those of their competitors by

tactics such as brand names. Their degree of competition is

a. pure competition.

b. oligopoly.

c. monopoly.

d. monopolistic competition.

e. none of these.

Difficulty: 1 Page-Reference: 22

Question ID: 01-1-99 Skill: Comprehension

Objective: 1.4

100. Great Lakes Power is the only company that supplies power to rural areas. What situation

would the company be in?

a. Oligopoly

b. Pure competition

c. Monopolistic competition

d. Monopoly

e. None of these

Difficulty: 1 Page-Reference: 22

Question ID: 01-1-100 Skill: Comprehension

Objective: 1.4

101. Tide, Pepsi, Guess, and Body Shop are all corporations involved in which type of competition?

a. Pure competition

b. Oligopoly

c. Monopolistic competition

d. Equilibrium

e. None of these

Difficulty: 2 Page-Reference: 22

Question ID: 01-1-101 Skill: Comprehension

Objective: 1.4

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

102. What is a “natural” monopoly?

a. One that occurs without any business firm trying to achieve it, i.e., it just happens because the

business does things right

b. A situation where one company can most efficiently supply all the product or service that is needed

by consumers

c. One where government finds it “natural” to grant monopoly powers to certain business firms such

as consumer products companies

d. One that occurs when a business firm sets out to achieve a monopoly and no other firm tries to

stop it

e. There is no such thing as a natural monopoly.

Difficulty: 2 Page-Reference: 23

Question ID: 01-1-102 Skill: Knowledge

Objective: 1.4

103. The Industrial Revolution refers to

a. fur and fishing industry in Canada in the 1500s.

b. a major change in the production of goods that began in England in the mid 1700s.

c. development of the entrepreneurial era.

d. development of the internet era.

e. none of the above.

Difficulty: 2 Page-Reference: 25

Question ID: 01-1-103 Skill: Knowledge

Objective: 1.5

104. What basic argument did Adam Smith make in his book, The Wealth of Nations?

a. Someone will be more successful in business if he or she is a leader and true entrepreneur.

b. Socialism is the best economic system.

c. National wealth was created fastest by the mercantile system.

d. Government should not interfere in the economy, but should let businesses function without

regulation or restriction.

e. The government should own the means of production.

Difficulty: 1 Page-Reference: 25

Question ID: 01-1-104 Skill: Knowledge

Objective: 1.5

105. Which of the following arrangements of eras most accurately reflects the history of business in

Canada, from earliest to most recent?

a. Marketing era, entrepreneurial era, Industrial Revolution, production era, global era, internet era

b. Entrepreneurial era, Industrial Revolution, global era, marketing era, internet era, production era

c. Industrial Revolution, entrepreneurial era, production era, marketing era, global era, internet era

d. Production era, Industrial Revolution, entrepreneurial era, marketing era, global era, internet era

e. Industrial Revolution, production era, entrepreneurial era, marketing era, internet era, global era

Difficulty: 1 Page-Reference: 25–28

Question ID: 01-1-105 Skill: Knowledge

Objective: 1.5

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

106. The ________ philosophy says that the government should not interfere in the economy, but

should instead let business function without regulation according to its own “natural” laws.

a. market economy

b. natural selection

c. laissez-faire

d. invisible hand

e. entrepreneurship

Difficulty: 1 Page-Reference: 25

Question ID: 01-1-106 Skill: Knowledge

Objective: 1.5

107. Which of the following eras was prompted by increased consumer demand after World War II?

a. Production era

b. Global era

c. Entrepreneurial era

d. Industrial Revolution

e. Marketing era

Difficulty: 1 Page-Reference: 27

Question ID: 01-1-107 Skill: Knowledge

Objective: 1.5

108. Which of the following eras is tied to the prosperity of the 1950s and 1960s?

a. Marketing era

b. Industrial Revolution

c. Internet era

d. Production era

e. Entrepreneurial era

Difficulty: 1 Page-Reference: 27

Question ID: 01-1-108 Skill: Knowledge

Objective: 1.5

109. Technological advances, improved communication, and more efficient transportation networks

contributed to the emergence of the

a. global era.

b. marketing era.

c. entrepreneurial era.

d. production era.

e. Industrial Revolution.

Difficulty: 2 Page-Reference: 27

Question ID: 01-1-109 Skill: Knowledge

Objective: 1.5

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

110. The early years of business in Canada were motivated by

a. a desire to settle the Prairies.

b. profits from fishing.

c. profits from mining.

d. a desire to find a way to China.

e. profits from logging.

Difficulty: 1 Page-Reference: 24

Question ID: 01-1-110 Skill: Comprehension

Objective: 1.5

111. Why was Canadian manufacturing slow to develop in the 16th and 17th centuries?

a. Too few manufacturing managers

b. Too few buyers of manufactured goods

c. Most people were involved in trading of furs

d. Most people were involved in farming

e. Policy of mercantilism

Difficulty: 2 Page-Reference: 25

Question ID: 01-1-111 Skill: Comprehension

Objective: 1.5

112. All of the following are true about the Industrial Revolution except

a. it led to the development of the factory system.

b. it enabled mass production.

c. it led to wide use of semi-skilled employees.

d. it discouraged specialization of labour.

e. it led to the decline of cottage industries.

Difficulty: 2 Page-Reference: 25

Question ID: 01-1-112 Skill: Knowledge

Objective: 1.5

113. During which period did mass production reduce duplication of equipment and allow firms to

purchase raw materials at better prices?

a. Entrepreneurial era

b. Industrial Revolution

c. Production era

d. Colonial period

e. Marketing era

Difficulty: 2 Page-Reference: 28

Question ID: 01-1-113 Skill: Knowledge

Objective: 1.5

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

114. Which of the following best illustrates specialization of labour?

a. Workers who learn new, specialized skills are rewarded with higher pay.

b. Semi-skilled workers are trained to perform only one task.

c. Each labour union represents only one type of worker.

d. Highly skilled craftspeople can do all the tasks required to make an item.

e. Raw materials were provided to England in return for finished goods.

Difficulty: 3 Page-Reference: 25

Question ID: 01-1-114 Skill: Comprehension

Objective: 1.5

115. Which of the following occurred when the factory system began?

a. All the materials and labour required to produce items in massive quantities were brought to one

place.

b. The size and economic power of some firms meant that other businesses had difficulty competing

against them.

c. It produced captains of industry who were interested in meeting the needs of the customer.

d. A laissez-faire management process developed.

e. Factory workers became owners through ESOPs.

Difficulty: 3 Page-Reference: 25

Question ID: 01-1-115 Skill: Comprehension

Objective: 1.5

116. The Scientific Management Movement can be best characterized by the phrase

a. “quality is job 1.”

b. “empowerment to employees.”

c. the “one best way.”

d. “progress through technology.”

e. “cooperation between management and union.”

Difficulty: 2 Page-Reference: 26

Question ID: 01-1-116 Skill: Comprehension

Objective: 1.5

117. Which best completes the following sentence? During the production era

a. the factory system brought together in one place all the materials and workers required to

produce items in large quantities.

b. great emphasis was placed upon satisfying the customer.

c. the improved production output resulting from assembly lines was obtained by increasing worker

freedom.

d. the presence of big firms aided individuals who wished to go into business for themselves.

e. Henry Ford introduced the first moving assembly line which brought automobile parts to the worker.

Difficulty: 3 Page-Reference: 26

Question ID: 01-1-117 Skill: Comprehension

Objective: 1.5

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

118. The development of labour unions and collective bargaining agreements were major elements

of the

a. colonial period.

b. production era.

c. global era.

d. entrepreneurial era.

e. industrial revolution.

Difficulty: 2 Page-Reference: 26

Question ID: 01-1-118 Skill: Knowledge

Objective: 1.5

119. What are the three countervailing powers in today’s society?

a. Consumers, government, business

b. Consumers, business, public opinion

c. Government, business, public opinion

d. Government, business, labour

e. Consumers, government, public opinion

Difficulty: 2 Page-Reference: 27

Question ID: 01-1-119 Skill: Knowledge

Objective: 1.5

120. Why did businesses move from a production orientation to a sales orientation?

a. Businesses experienced greater competition.

b. Businesses were able to develop niche marketing schemes.

c. Businesses discovered the power of advertising.

d. Businesses were able to keep their production costs low.

e. Businesses were becoming very good at creating new products.

Difficulty: 3 Page-Reference: 27

Question ID: 01-1-120 Skill: Comprehension

Objective: 1.5

121. Why did businesses adopt the marketing approach?

a. Mass markets required mass advertising, which is what marketing does.

b. There was pent-up demand after World War II.

c. Competition between businesses became greater than ever.

d. Production costs got to be about as low as they were going to get, thus profit would not improve.

e. The competition for sales representatives increased as employees became very intense.

Difficulty: 2 Page-Reference: 27

Question ID: 01-1-121 Skill: Comprehension

Objective: 1.5

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

122. Able Manufacturing is very good at making kitchen utensils. However, it wants to ensure that its

products will always be profitable. What should it do?

a. Hire the finest sales representatives to sell what it makes

b. Determine customer needs and focus its product lines to fill those needs

c. Lower the costs of production so the products are always profitable

d. Change its product lines to fit what its management thinks customers want

e. Try charging a lot of money for its products in the hope that it will result in snob appeal

Difficulty: 2 Page-Reference: 27

Question ID: 01-1-122 Skill: Application

Objective: 1.5

123. The laissez-faire attitude toward the economy as adopted by the Canadian government was a

characteristic of the ________ era.

a. sales and marketing

b. finance

c. entrepreneurial

d. global

e. production

Difficulty: 1 Page-Reference: 25

Question ID: 01-1-123 Skill: Knowledge

Objective: 1.5

124. The _________ era was the result of the moving assembly line introduced by Henry Ford.

a. finance

b. production

c. global

d. entrepreneurial

e. sales and marketing

Difficulty: 1 Page-Reference: 26

Question ID: 01-1-124 Skill: Knowledge

Objective: 1.5

125. Which of the following is correct with respect to the production era?

a. It began with the invention of the steam engine.

b. The scientific management movement emphasized the management of people through an

understanding of the needs they brought to the workplace.

c. Mass production increased the available labour pool because many people could be trained to

carry out assembly line tasks.

d. Workers gained more freedom during the production era.

e. None of these statements are accurate.

Difficulty: 3 Page-Reference: 26

Question ID: 01-1-125 Skill: Knowledge

Objective: 1.5

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

126. How does the internet affect domestic and global business?

a. It offers networking potential to businesses.

b. It boosts trade in all sectors.

c. It has made it easier for trade to occur.

d. It levels the playing field between small and large firms.

e. All of these statements are accurate.

Difficulty: 3 Page-Reference: 27

Question ID: 01-1-126 Skill: Comprehension

Objective: 1.5

127. Which of the following was a characteristic of the sales and marketing eras?

a. By the first decade of the 20th century, production had resulted in spectacular increases in the

amount of goods and services that were available.

b. During the sales era, much emphasis was placed on market research to find out what customers

wanted.

c. During the marketing era, it was assumed that business profits and business success depended on

hiring the right salespeople and advertising heavily.

d. During the sales era, business firms produced what they were good at producing, rather than what

consumers wanted.

e. None of these statements are accurate.

Difficulty: 3 Page-Reference: 27

Question ID: 01-1-127 Skill: Knowledge

Objective: 1.5

1. Profits from business are used to support government as well as business owners and

shareholders.

a. True

b. False

Difficulty: 2 Page-Reference: 6

Question ID: 01-2-128 Skill: Comprehension

Objective: 1.1

2. In 2011, the top three profit-making companies in Canada were all oil companies.

a. True

b. False

Difficulty: 2 Page-Reference: 6

Question ID: 01-2-129 Skill: Knowledge

Objective: 1.1

3. A business is an organization that seeks to earn profits by providing goods and services.

a. True

b. False

Difficulty: 2 Page-Reference: 6

Question ID: 01-2-130 Skill: Knowledge

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

Objective: 1.1

4. The term “business” includes large organizations such as General Motors, which seek a profit, but

does not include individuals who are self-employed, e.g., a carpenter, or a beautician who operates a

shop in her home.

a. True

b. False

Difficulty: 2 Page-Reference: 6

Question ID: 01-2-131 Skill: Application

Objective: 1.1

5. A charitable organization is classified as a business firm if it provides physical goods, but not if it

provides only services.

a. True

b. False

Difficulty: 3 Page-Reference: 7

Question ID: 01-2-132 Skill: Comprehension

Objective: 1.1

6. Charitable organizations, churches, and government agencies are all examples of non-profit

organizations.

a. True

b. False

Difficulty: 2 Page-Reference: 7

Question ID: 01-2-133 Skill: Comprehension

Objective: 1.1

7. An economic system allocates a nation’s resources among its citizens.

a. True

b. False

Difficulty: 2 Page-Reference: 7

Question ID: 01-2-134 Skill: Knowledge

Objective: 1.2

8. Natural resources include land and mineral deposits.

a. True

b. False

Difficulty: 1 Page-Reference: 8

Question ID: 01-2-135 Skill: Knowledge

Objective: 1.2

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 1—Understanding the Canadian Business System

9. The natural resources component of the factors of production includes the physical and mental

capabilities of people in the workforce.

a. True

b. False

Difficulty: 1 Page-Reference: 8

Question ID: 01-2-136 Skill: Knowledge

Objective: 1.2

10. In a command economy, a centralized government controls all, or most, of the factors of

production and makes most decisions involving production of goods and services.

a. True

b. False

Difficulty: 1 Page-Reference: 9

Question ID: 01-2-137 Skill: Knowledge

Objective: 1.2

11. Communism is an example of a market economy where a central government controls most

factors of production.

a. True

b. False

Difficulty: 1 Page-Reference: 9

Question ID: 01-2-138 Skill: Comprehension

Objective: 1.2

12. Communism and socialism are both types of command economies.

a. True

b. False

Difficulty: 1 Page-Reference: 9

Question ID: 01-2-139 Skill: Comprehension

Objective: 1.2

13. Although workers in socialist countries are usually allowed to choose their occupations, a large

proportion generally work for the government.

a. True

b. False

Difficulty: 2 Page-Reference: 9

Question ID: 01-2-140 Skill: Knowledge

Objective: 1.2

14. A mixed market economy has elements of both a command economy and a market economy.

a. True

b. False

Difficulty: 2 Page-Reference: 11

Question ID: 01-2-141 Skill: Knowledge

Objective: 1.2