University Of Toronto at Scarborough
MGTA03 - Introduction to Management I
Mid-Term Test – March 12, 2011
MULTIPLE CHOICE QUESTIONS BOOK – VERSION 1
(Please print NEATLY)
1. On the SCANTRON answer sheet:
PRINT your family name,
PRINT your given name
PRINT your student number
2. On the SCANTRON answer sheet
fill in all the appropriate bubbles corresponding to your name,
fill in all the appropriate bubbles corresponding to your student number
3. Instructions 1 and 2 (above) are an integral part of the examination. Failure to
comply with these simple instructions causes additional work, delay and
confusion. If you fail to complete the relevant sections of the SCANTRON sheet correctly
and fully, you will have 5 marks deducted from your grade on this exam!
4. When recording your answers on the SCANTRON sheet, make sure you:
a) Use a pencil
b) Fill in the SCANTRON bubbles neatly and completely
c) Erase any changes as completely as possible
d) Be very careful to place each answer in the correct space
5. You have 90 minutes to write the exam.
This booklet consists of 44 multiple-choice questions. MGTA03 – Midterm Test – March 12, 2011
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers
1) What is the version of the exam you are writing? (Correct Answer is A)
a) Version 1
b) Version 2
2) 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
3) Of the following, which is a way in which monopolistic competition differs from perfect
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
c) In a market characterized by monopolistic competition, a few firms have some control
d) None of the above.
4) Entrepreneurs are important because they:
a) provide all of the capital to start new businesses
b) assemble and organise the resources to start new businesses
c) both a and b are true.
d) neither a nor b is true.
5) The price of cooking oil rises 5%. Tim Hortons then raises the price of its donuts by 9%. At the
same time, the Highland Creek Bakery raises the price of its donuts by 5%. This kind of pricing
strategy would suggest these businesses are engaged in:
a) perfect competition
b) a monopoly
c) an oligopoly
d) monopolistic competition
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6) Labour includes:
a) all the workers involved with the business
b) only workers who do work directly to product or service
c) only people who are not managers
d) only employees who must be paid
7) When is an industry likely to be dominated by small business firms?
a) where a lot of resources are needed
b) where few resources are needed
c) where machine, materials, employees, and money are needed
d) where considerable resources, a distribution network, and advertising are needed
8) 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
9) 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.
10) Which of the following is not a characteristic of a typical entrepreneur?
a) Preference for taking risks.
b) Desire for responsibility.
c) Desire for immediate feedback.
d) Confidence in their ability to succeed.
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11) The primary motivating force behind entrepreneurs is:
12) A factor that contributes directly to improving labour as a factor of production is:
a) creation of more part-time jobs
b) programs that decrease unemployment
c) better education for more of the population
d) programs which lower the rate of inflation
13) Which of the following would be included in the gross domestic product 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
14) The ________ rate is the percentage change in prices from one year to the next.
15) Inflation rates in Africa for 2007 covered a wide range. They run from -8.8% in Chad to
10,453% in Zimbabwe. This means:
a) What cost $1 U.S. in Zimbabwe a year ago now costs $10,453 U.S.
b) Cash payments in the local currency in Chad must be spent immediately to be of any
c) The standard of living in rose in Chad in 2007
d) Workers in Zimbabwe would prefer to be paid in U.S. dollars (or any other currency)
rather than in their own currency
16) The standard of living increases when:
a) the real growth rate of GDP is higher than the nominal growth rate of GDP
b) the real growth rate of GDP exceeds the population growth rate
c) the rate of inflation is lower than the real growth rate of GDP
d) the real growth rate of GDP is less than the growth rate of the trade deficit
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17) Which of the following did not occur as result of the recent (2008-2009) recession in the United
a) GDP fell
b) unemployment rose
c) GDP per capita fell
d) interest rates rose
e) government deficits increased
18) Why is it difficult to compare the CPI for 1919 with the CPI for 2009?
a) the First World War led to large price increases that distort the 1919 CPI
b) the basket of items in 1919 is very different from the basket in 2009
c) the base year has changed since 1919
d) Canadians are wealthier in 2009 than they were in 1919
19) 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
20) The extent to which people believe either internal or external events determine outcomes is
a) external/internal orientation.
b) locus of control.
c) an interdependent sense of self.
d) an independent sense of self.
21) The number of Canadian 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
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22) Why is China 4th in overall GDP but 109th in GDP per capita?
a) There are many people living in China
b) The Chinese are not very innovative
c) Many foreign firms have invested in China and repatriate profits
d) The Chinese lack modern labour protections and safety standards
23) Unemployment is the level of joblessness among
a) people over the age of 18 and under the age of 65 actively seeking work in a given
b) people over the age of 18 and under the age of 65 in a given economy.
c) people over the age of 18 and under the age of 65 able to work in a given economy.
d) people actively seeking work within a given economy.
24) Statistics Canada has published the following figures for the CPI:
Year 2008 2009
Toronto 110.8 113.1
Montreal 110.3 112.5
From these figures, we can conclude:
a) Prices in Toronto are higher than in Montreal
b) Consumers in Montreal purchased slightly less in 2009 than those in Toronto
c) From 2008 to 2009, prices rose by about 2% in both Toronto and Montreal
d) It is more expensive to live in Montreal than in Toronto
25) Socialism is best described as:
a) an economy that is free from any regulation or plann