MGTA03 - INTRODUCTION TO MANAGEMENT I
2011 Winter – Mid-Term Test – March 12th, 2011
Model Answers to SAQs
Identify the degree of competition of the cell phone industry in Canada1 mark
The Canadian cell phone industry is an Oligopoly 1 mark
Explain and justify your answer by identify at least three features of this degree
of competition, and relate these features to the cell phone industry in3 marks
We can say that is an oligopoly because the industry has the following
1) A small number of suppliers (3 main providers Rogers, Bell, Telus =
95% of all subscribers) dominates the industry
2) Each of the few cell phone companies is "large", i.e. large in terms of
volume of sales, number of employees, number of customers, etc.
3) There are only a few suppliers because there are barriers to entry: large
4) There are economies of scale, i.e. the huge costs of installing a network
can be lowered on a per-customer basis if you have very many subscribers.
5) The competitors watch each others' pricing policies closely, and tend to
match each others' price changes and marketing initiatives, quickly..
Page 1 of 4 Question 2
When measuring an economy's economic performance, the officially reported rate of "unemployment"
is usually thought to under-report an economy's ability to fully and effectively utilise its labour
This was attributed to both "underemployment" and the "discouraged worker" effect.
Explain what is meant by "underemployment" 2 marks
Underemployment: means that workers are not working at their full
potential. Either they are working at part time (rather than full time) jobs, or
they are working at jobs that are not fully exploiting their expertise and
education. e.g. a nuclear engineer driving a taxi, a Ph. D. chemist working as
a greeter at Wal-Mart.
Unemployment statistics will show these people as having jobs, but they are
earning less than they would like, and contributing to society less than they
Explain what is meant by the "discouraged worker" effect. 2 marks
Discouraged Worker: means people who might normally be looking for a
job (and therefore be counted as part of the workforce) have judged the
chances of their finding employment are too remote to even bother trying.
Therefore, talented people who might be working choose instead to retire, to
go back to school, to travel, or to be full time home makers, rather than to be
unemployed or underemployed. Because they have withdrawn themselves
from the work force (i.e. they are not actively looking for work) they are not
considered to be unemployed.
Page 2 of 4 Question 3
The American Psychologist David McLelland developed the "needs motivation" theory. McLelland's
theory suggests that every person poss