1. A balance sheet shows: A: the assets, liabilities, and owner's equity of a particular business. B: a business's profit. C:all costs incurred over a period of time. D: a business's activities over a given period of time.
2. A perfectly competivite business's average revenue equals: A: the price being charged for the product when price discrimination is being practised. B:total revenue divided by price. C:its marginal revenue. D:ts total revenue.
3. A perfectly competivitive business's demand curve is: A:straight line parallel to the vertical curve axis. B: upward-sloping straight line reflecting the constant value of price as output increases. C:downward-sloping straight line reflecting the low of demand. D:straight line parallel to the horizontal axis.
4. A price index is : A:a ratio of real GDP to nominal GDP. B:the cost of a basket of products in a base period divided by the cost of the same basket in another period. B: a comparison of products in a base period divided by the cost of the same bakset in nother period. C:a comparsion of the price of a basket of products from a fixed point of reference. D: a comparison of real GDP in one period relative to another.
5. According to Keynes, unemployment could be casued by: A:excessive government spending. B: low interest rates. C: a deficiency in aggregate expenditure. D: excessive increases in money supply.
6. All businesses, whatever market structures they operate in, can maximize profits by finding the output level at which marginal revenue interenue intersects marginal cost select one: True/ False
7. An explicit cost is: A: a payment made for resources not owned by the frim itself. B: omitted when accounting profits are calculated. C: always in excess of a resource's opportunity cost. D: an implicit cost to the resource owner who receives that payment.
8. Assume a manufacturer of stereo speakers purchases $40 worth of components for each speaker. the completed speaker sells for $70. The value added by the manfacturer for each speaker is :A: $30. B:$40. C:$110. D:$70
9. Becasue a monopolist has no competitors due to entry barriers, it is able to: A:satisfy only the minimum-cost pricing condition. B: saatisfy only the marginal-cost pricing condition. C:keep price constant in the long run. D: satisfy both minimum-cost marginal-cost pricing conditions.
10. Because of limited competition, oligopolists can not make an economic profit even in the long run. True/False
11. Cost-of-living adjustment clauses(COLAs): A: apply only to younger workers. B:cause workers to experience significant changes in real income. C: make the effect of inflation more harmful for some workers. D:none of these is true.
12. GDP can be calculated by adding: A: consumption, net investment, wages, and rents. B:gross investment, government purchases, consumption, and net exports. C:consumption, gross investment, government purchases, exports, and imports. D: consumption, gross investment, government purchases, and imports.
13. GDP may be defined as: A: the monetary value of all goods and services produced within a nation in a given year. B: NDI minus all nonincome charges against output. C:the monetary value of the capital stock used in the production of year's output. D:the monetary value all goods and services- final and intermediate- produces in a given year.
14. Government regulation of natural monopolies is: A: totally unnecessary as free markts operate efficiently and equitable. B:needed to ensure the operation of such monopolies in the long sun. C: needed to ensure that the cost savings resluting from increasing returns to scale are passed on to the consumer. D:a complex task as it requires estimating consumer desires.
15. if kenny earned $200 at the start of the year and there is 5% inflection, at the end of value of the $200 is: A:$190. B:$205. C:$195. D:$210
16. if Mr. Martin's income increase by 2% annually, how long will it take to double? A:28.6 years. B:37.5 years. C:35 years D:30 years.
17. if the consumer price index rises from 300 to 333 ina particular year, the rate of inflation in that year is: A:33 percent. B:10 percent. C:11percent. D:91 percent.
18. in the long run: A:all costs are fixed costs. B: variable costs equal fixed costs. C:all costs are variable costs. D:fixed costs are greater that variable costs.
19. inflation means that: A:all prices are rising, but at different rates. B: real incomes are rising. C: all prices are rising, and at the same rate. D: prices are rising in general, although some particular prices may be falling.
20. Joseph Schumpeter's theories paralleled Karl Marx's as both: A:predicted the downfall capitalism. B:saw the process of" creative destruction" as necessary for economic growth. C: saw entrepreneurs as the driving force behind economic progress. D:used only the tools of economic theory to support their beliefs.
21. Marginal cost may be defined as the: A:change in average variable cost that results from producting one more unit of output. B:rate of change in fixed costs that resluts from producting one more unit of output. C: change in total cost that results from producing one more unit of output. D: change in average cost that results from producing one more unit of output.
22. Natalie voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree. With degree in hand, she is now searching for a position in management. At present, Natalie is: A: frictionally unemployed. B: structurally unemployed. C: not a member of the labour force. D:cyclically unemployed.
23. National income accountants can avoid double counting by: A: counting only intermediate products. B: counting only final products. C:including government transfer payments in their calculations. D: counting both intermediate and final products.
24. Net exports may be defined as: A imports minus exports. B: exports plus imports. C:exports minus imports. D: the portion of domestic products sent to other countries.
25. Professor Shields grows tomatoes in her garden for her family and friends. this activity is: A: excluded from GDP to avoid double counting. B: excluded from GDP because from GDP because an untermediate product is involved. C: included in GDP because it reflects production. D:a productive activity, but is excluded from GDP because no money changes hands.
26. Sebastian has lost his job in a Quebec textile plant because of import competition. He intends to take a short course in electronics and move to Ontario where he anticipates new jobs will be available. We can say that Sebastian is faced with: A:frictional unemployment. B:secular unemployment. C:structural unemployment. D:cyclical unemployment.
27. Setting a"fair rate of return" leads to inefficiencies: True/ False
28. Suppose that there are 1 million unemployed workers seeking jobs. After a period of time, 100 000 of them become discouraged over their job prospects and cease looking for work. As a result, the official unemployment rate would: A: decrease. B:increase in the short run, but eventually decrease. C:remain unchanged. D:increase.
29. The"fair rate of return" is the minimum accounting profit rate allowed for a regulated monopoly: True/ False.
30. The advantages of the corperate from of business include: A:the fact that owners are subject to unlimited liability. B: guaranteed co-operation between management and owners. C:the guarantee to shareholders of a positive return on their financial investments. D: the ability to raise money capital by selling stocks and bonds.
31. The amount of after-tax income received by households is measured by: A:PI. B:DI. C: NDI. D:discretionary income.
32. The division of Canadian businesses into the categories of proprietorship, partnership, and corporations is based on: A:legal restrictions. B:an executive order of the Prime Minister. C:the rules of the Bank of Canada. D:generally accepted accounting principles.
33. The main difference between GDP and GNP excludes: A: depreciation of fixed capital. B:transfer payments. C: net investment income to foreigners. D:government purchases.
34. The operation of all business and industries typically fall into these sections of production: A: the cultivation of nature resources, the processing and fabrication of good, and the provision of services. B: agriculture, manufacturing, and service. C: mining, forestry, and fishing. D: primary, secondary, and capital-intensive.
35. The profit-maximizing output rule applies: A: only to monopolies. B: only to perfectly competitive businesses. C: to business in all types of industries. D: only when the business is a"price-taker"
36. The rate of inflation can be found by subracting: A: last year's price index from this year's price index. B: last year's price index from this year's price index, and diving the difference by last year's price index. C: this year's price index from last year's price index, and dividing the difference by this year's price index. D: the real income from the nominal income
37. The three basic legal forms of business enterprise are: A:vertical, horizontal, and conglomerate corporations. B:monopolists, competitors, and enterprises. C:sole proprietorships, partnerhsips, and corporations. D: conglomerates, multinationals, and partnerships.
38. The type of unemployment associated with downturns in the economy is called: A:structural unemployment. B: cyclical unemployment. C: seasonal unemployment. D:frictional unemployment.
39. The unemployment rate is the: A: percentage of the labour force that is out of work. B: number of employed workers minus the number of workers who are not in the labour force. C: percentage of the total population that is out of work. D: ratio of unemployed to employed workers.
40. To be officially unemployed, aperson must: A:be 21 years of age or older. B: be waiting to be called back from a layoff. C:have just lost a job. D: be in the labour force.
41. To economiists, the main difference between" the short run" and" the long run" is that: A: the law of diminishing marginal returns applies in the long run but not in the short run. B: in the short run all resourses are fixed, while in the long run all resources are variable. C: fixed costs are more important to decision making in the long run than they are in the short run. D: in the long run, all resources are variable while in the short run, at least one resource is fixed.
42. which of the following best defines disposable income? A: income received by households less personal taxes and other personal transfers to government. B: all income earned by resource suppliers for their current contributions to production. C: the market value of the annual output of all final goods and services. D: the before-tax income received by households.
43. which of the following is a final product? A: diesel fuel bought for a delivery trunk. B:a haricut. C: Chevrolet windows purchased by a General Motors assembly plant. D: fertilzer purchased by a farm supplier.
44. which of the following is a variable input? A: labour. B: land available for cultivation. C:machinery. D: production plants.
45. which of the following is an implicit cost to the Johnston Manufacturing company? A: returns that the shareholds could have received if they had not bought shares in the Johnson Manufacturing company. B: payments of wages to its office workers. C: property taxes. D: rent paid for the use of equipment owned by the Schultz Machinery Company.
46. which of the following is an output? A: a CD being sold popular music stores. B: an accountant hired by the Canadian Apple Cider Company. C: a plough used by wheat farmers. D: a refriderator used to store frozen foods in grocery stores.
47. which of following is must likely to be a fixed cost: A: shipping charges. B: expenditures for raw materials. C: wages for unskilled workers. D:property insurance premiums.
48. which of following is most likely to be a variable cost: A: rental payments on IBM equipment. B: interest on bonds. C: fuel and power payments. D:real estate taxes.
49. which of the following statements best expresses the law of diminishing marginal returns? A:as successive amounts of one resources(labour) are added to fixed amounts of other resources, beyond some point the resulting extra output will decline. B: the same percentage increase in all inputs will reslut in a lower percentage increase in total output. C: because large-scale production allows the realization of increasing returns to scale, the costs of production very directly with the level of output. D: population growth automatically adjusts to that level at which the average product per worker will be at a maximum.
50. whom of the following is least likely to be hurt by unanticipatyed inflation: A: a retired steelworker with a partially indexed pension B: a secretary. C:an owner of small business with high debts. D: a disabled labourer who is living off accumulated savings