MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) What is the version of the exam you are writing? (Correct Answer is A)
A) Version 1
B) Version 2
2) The number of Canadians employed by small businesses is approximately:
A) 10% of the total workforce
B) 20% of the total workforce
C) 50% of the total workforce
D) 98% of the total workforce
3) A public corporation is one whose shares are:
A) available for sale through a stock exchange
B) chartered by the federal government
C) owned by all taxpayers in a country
D) owned by the government, hence "public"
E) widely held, so there is no majority shareholder
4) Which of the following would be included in the gross domestic of Canada
A) the profits earned by a Canadian-owned automobile plant in Brazil
B) the wages paid to Peruvian workers producing coffee for a Canadian company
C) the wages paid to Brazilian workers producing coffee for sale in Canada
D) the profits earned by a Brazilian coffee company operating in Canada
5) Five students wish to start a new business called “Computers-B-Us.” Each student is prepared to invest the same amount and wants to share
equally in the profits and management, while limiting their liability. They would most likely start their business as a:
A) private corporation
B) public corporation
C) sole proprietorship
D) limited partnership
E) general partnership
6) Advantages of the corporation as a form of business organization do not include:
A) the guarantee of fixed dividends
C) limited liability
D) ease of raising capital
E) ability to hire professional managers
MGTA03 – Fall 2010 – Mid-Term Test – November 5, 2010 Version 1 Page 3 of 10 7) Inflation rates in Africa for 2007 cover a wide range. They run from - 8.8% in Chad to 10,453% in Zimbabwe. This means that in 2008:
A) Cash payments in the local currency in Chad must be spent immediately to be of any value
B) What cost 1 pound sterling in Zimbabwe in 2007 costs 10,453 pounds sterling in 2008
C) Workers in Zimbabwe want to be paid in pounds sterling instead of Zimbabwe dollars
D) Consumer prices rose in Chad last year
E) There is a lively international trade in Zimbabwe dollars
8) Which one of the following is not a characteristic of an oligopoly?
A) great product differentiation
B) prices differ greatly
C) few sellers
D) many buyers
9) Of the following, which is a way in which monopolistic competition differs from perfect competition?
A) There are more sellers in a market characterized by monopolistic competition.
B) It is easier for sellers to enter a market/industry characterized by monopolistic competition.
C) In a market characterized by monopolistic competition, individual firms have some control
D) In a perfectly competitive market, products are more dissimilar.
E) None of the above.
10) How do most people start a new business?
A) start it themselves
B) buy out the other partner
D) buy an existing business
E) inherit the business
11) Gilbert is considering setting up a business. He likes some of the advantages of sole proprietorships, but is concerned about some of the
disadvantages. He should consider all of
the following except:
A) difficulty in getting bank loans
B) unlimited liability
C) difficulty of liquidation
D) limited managerial and financial resources
E) difficulty of passing the business on to his heirs
MGTA03 – Fall 2010 – Mid-Term Test – November 5, 2010 Version 1 Page 4 of 10 12) Small businesses:
A) cannot begin as a business corporations
B) must begin as either sole proprietorships or partnerships
C) must begin as a sole proprietorships
D) can begin as business corporations, sole proprietorships, or partnerships
E) must begin as business corporations
13) When the value of the Canadian dollar drops:
A) our imports become less affordable and our exports become more affordable
B) both our imports and our exports become more affordable
C) our imports become more affordable and our exports less affordable
D) there is no change in the affordability of our imports and our exports
E) both our imports and our exports become more affordable
14) Low unemployment can result in
A) increases in wage rates.
B) a shortage of labor.
C) neither of the above
D) both of the above
15) A limited partnership attempts to:
A) provide for continuity of operation upon the departure of one of the partners
B) limit the number of partners who may vote at board meetings
C) limit the number of partners who may purchase a share of ownership
D) avoid the problem of unlimited liability for the owners
E) limit the geographical area of operation for a business firm
16) A general partnership has advantages which are similar to a sole proprietorship, such as:
A) providing for continuity
B) limiting owner's liability
C) being dependent upon resources of an individual
D) easy to transfer ownership
E) being simple to organize
MGTA03 – Fall 2010 – Mid-Term Test – November 5, 2010 Version 1 Page 5 of 10 17) Mario's Pizzeria sells only two kind of pizza: plain and all-dressed. Last year, Mario's Pizzeria sold 2,000 all-dressed pizzas, selling them for $10
each. Mario's sold 10,000 plain pizzas at $5 each. The cost of the ingredients, the box, and all of the electricity and utilities to make the pizzas came
to $20,000. In addition, Mario paid $10,000 rent for the store. Finally, Mario paid a total of $10,000 to a couple of students who worked part time,
helping out on busy Friday and Saturday nights. Mario paid himself no salary, but took home all of the profits. Last year, Mario made a profit of
D) loss of -$10,000
18) This year, Mario Pizzeria decided to reduce the price of its all dressed pizza from $10 down to $8. Mario thought that this might increase the
volume of sales. He was correct. The lower price increased demand for all-dressed pizzas from 2,000 to 3,000 during the year. The extra pizzas
meant that Mario spent an additional $2,000 to make the additional pizzas. His rent and the cost of employing the two part time workers did not
change. Since Mario lives off of the profit from his business, the decision to lower the price of his pizzas was:
A) a good idea – the business made a larger profit.
B) a bad idea – the business made a lower profit.
C) neither a good nor bad idea – the profit stayed the same.
D) we don't have enough information to know.
19) Partnerships, generally, are more advantageous than sole proprietorships because:
A) partners are jointly and severally liable
B) there are many types of partnerships
C) many people can be the president of the company
D) the talents of the partners can be pooled
E) some businesses can only be formed as partnerships
20) On a graph showing the supply curve and the demand curve, the point at which the two curves intersect is called:
A) the equilibrium price
B) the aggregate demand
C) the break-even price
D) the aggregate supply
E) the equilibrium between aggregate supply and aggregate demand
MGTA03 – Fall 2010 – Mid-Term Test – November 5, 2010 Version 1 Page 6 of 10 21) Trade ________ tend to create ________ balances of payments.
A) imports, positive
B) exports, negative
C) exports or imports, no effect on
D) imports, no effect on
E) exports, positive
22) The balance of payments refers to:
A) the difference in exchange rates between two countries
B) the difference between money flowing into and out of a country as a result of trade and other transactions
C) the relative difference between money flowing into and out of a country
D) the relative difference in value between a country's total exports and its total imports
E) the difference in value between a country's total exports and its total imports
23) Due to his hard work and notable contributions as an employee of Kisk Electronics, Nori has just been elected to the board of directors of Kisk
Electronics. He will now be expected to fulfill his obligations as both an employee and director. Nori is a(n):
A) special representative
B) inside director
C) employee representative
D) corporate official
E) outside director
24) Why are income taxes called progressive taxes?
A) because poorer people pay proportionally more in taxes on all their income
B) the more one makes, the higher the income tax rate that is applied to one's entire income
C) because poorer people spend proportionally more on necessities
D) the more one progresses in a company, the more one pays in income taxes
E) the more one makes, the higher the income tax rate applied to the highest income earned
25) Brown Company wants to create an advantage over its competitors. To gain this advantage it must develop a product that must be either
____________ or ____________ competition.
A) priced the same, have poorer quality than
B) lower priced, equal the quality of
C) lower pr