The type of market in which businesses possess the least market power is a(n):

Multiple Choice

• monopoly, as it has no competitors
• oligopoly, as each business's size is large relative to the industry
• monopolistically competitive market, as each business differentiates its products
• competitive monopoly, because it combines both competition and monopoly
• perfectly competitive market, as each business is a price-taker

The scarcity problem:

Multiple Choice

• persists only because countries have failed to achieve continual full employment
• has been eliminated in all industrialized nations
• persists because a society's consumer wants exceed its available economic resources
• is eliminated when a nation has achieved full employment
• has been eliminated in affluent societies such as Canada and the United States

Implicit and explicit costs are different in that:

Multiple Choice

• implicit costs are relevant only in the short run
• explicit costs are relevant only in the short run
• implicit costs refer to nonexpenditure costs and explicit costs to out-of-pocket costs
• explicit costs are relevant only in the long run
• explicit costs refer to the nonexpenditure costs and implicit costs to out-of-pocket costs

The profit-maximizing output rule can be used to determine an output level that will:

Multiple Choice

• guarantee the business a profit
• minimize a business's loss
• result in a profit closest to zero at all times
• maximize a business's loss
• ensure a business's profit is positive

A labour-intensive process of production employs:

Multiple Choice

• more labour and less capital than other possible production processes
• less labour and less capital than other possible production processes
• an equal amount of labour, capital, and technology
• more labour and more capital than other possible production processes
• more capital and less labour than other possible production processes

Which of the following statements best expresses the law of diminishing marginal returns?

Multiple Choice

• As successive amounts of one resource (labour) are added to fixed amounts of other resources, beyond some point the resulting extra output will decline.
• Because large-scale production allows the realization of increasing returns to scale, the costs of production vary directly with the level of output.
• The same percentage increase in all inputs will result in a lower percentage increase in total output.
• Population growth automatically adjusts to that level at which the average product per worker will be at a maximum.
• The same percentage increase in all inputs will result in a higher percentage increase in total output.

Increasing returns to scale in an industry:

Multiple Choice

• give all businesses a competitive advantage
• generally means that businesses are relatively small
• increase a business's chance of becoming larger in size
• are more common in resource-based industries

Given a downward-sloping demand curve and an upward-sloping supply curve for a product, an increase in consumer incomes will:

Multiple Choice

• have no effect on equilibrium price and quantity
• reduce the quantity demanded, but not shift the demand curve
• increase equilibrium price and quantity if the product is a normal product
• decrease equilibrium price and quantity if the product is a normal product
• increase equilibrium price and decrease equilibrium quantity if the product is an inferior product

At the point where the demand and supply curves for a product intersect:

Multiple Choice

• the "selling price" and the "buying price" need not to be equal
• the quantity that consumers want to purchase and the amount producers choose to sell are the same
• either a shortage or a surplus of the product might exist, depending upon the degree of competition
• the market may, or may not, be in equilibrium
• price will be pushed either up or down, depending on whether there is a shortage or surplus

market is in equilibrium:

Multiple Choice

• at all prices below that shown by the intersection of the supply and demand curves
• if the amount that producers want to sell is equal to the amount that consumers want to buy
• provided there is no surplus of the product
• at all prices above that shown by the intersection of the supply and demand curves
• whenever the demand curve is downward-sloping and the supply curve is upward-sloping