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Management (MGT)
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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers
the question. 1) In the story "Voisey's Bay", Inco bought controlling interest in the site upon discovery of
one of the world's richest nickel finds. There were delays in development of the site because: 1) _______ A) of
a time-consuming and expensive environmental review process, along with difficult negotiations with the
government of Newfoundland B) Inco found a richer nickel mine in Malaysia C) Inco closed its Newfoundland
office D) Inco didn't have enough capital E) the company could not make a profit 2) Examples of businesses
include the following, except: 2) _______ A) large corporations like Canadian Pacific or Alcan Aluminum B)
one-person businesses, like barbershops C) local supermarkets D) non-profit organizations E) farms 3)
Deborah wants to set up a business, but also wants to be aware of the roles business should take. Which of
the following would Deborah not consider to be a role of business firms in the Canadian economy? 3) _______
A) support charitable organizations B) provide employment for citizens C) regulate the marketplace with
trade barriers D) provide profit incentive for business owners E) provide community leadership 4) Profit is:
4) _______ A) the amount of sales B) the taxes a company pays C) what remains after business expenses are
subtracted from business revenues D) the value of shares in a company E) the level of expenses 5) This
week, Mary's Variety had sales of $4 000, employees were paid$1 000, cost of goods was $1 500, and rent
was $500. Profit for the week was: 5) _______ A) $3 000 B) $4 000 C) $2 000 D) $1 000 E) $1 500 6) Most
of the goods and services consumed in Canada are produced by: 6) _______ A) business firms B) the
Canadian government C) the U.S. economy D) countries of the Pacific Rim E) overseas firms 7) An
economic system is: 7) _______ A) the way in which a nation allocates its resources among its citizens B) an
agreement between countries that deal with free trade C) a large government department that oversees
how the economy is running D) a long standing agreement between citizens and governments on how an
economy is run E) a government decree that requires certain goods and services to be provided 8) Jose is
from Guatemala. He is unsure about the nature of business in Canada. You point out that a typical business
in Canada operates the same as a typical business in: 8) _______ A) Japan B) People's Republic of China C)
England D) Peru E) France 9) All of the following are factors of production except: 9) _______ A) capital B)
labour C) entrepreneurs D) natural resources E) technology 10) Natural resources, as a factor of
production for mining, is a practical consideration when a mining company considers: 10) ______ A) the
number of customers who want to buy ore B) the ease with which ore could be mined C) the amount of
capital required to build the mine D) the profit that could be made from mining the ore E) the number of
miners available to mine the ore 11) Natural resources include: 11) ______ A) the funds needed to start and
operate a business B) a large number of people with entrepreneurial tendencies C) land, water, and mineral
deposits D) land, water, and gasoline E) the mental and physical capabilities of people 12) Labour
includes: 12) ______ A) only workers who do physical work B) only managers C) only non-unionized
employees D) only unionized employees E) everyone in the business 13) A factor that contributes directly
to improving labour as a factor of production is: 13) ______ A) increased purchasing power by employees B)
creation of more manual-labouring jobs C) free tuition at post-secondary educational institutions D)
programs that decrease unemployment E) better education for more of the population 14) Susan wants to
set up a small business. She should know that a major source of capital for most businesses, especially small
businesses, is: 14) ______ A) personal investment B) investors C) loans from banks D) business revenue E)
short-term loans 15) Marie owns a small restaurant and is thinking of expanding it to another location. She
is best described as a(n): 15) ______ A) administrator B) employee C) venture capitalist D) capitalist E)
entrepreneur 16) Entrepreneurs are important because they: 16) ______ A) are good managers B) are good
at making decisions C) make lots of money D) are rich E) take risks to start new businesses 17) Bruce is
wondering if he has the characteristics to be a good entrepreneur. You indicate that all of the following are
characteristics of entrepreneurs except: 17) ______ A) a desire for a low-risk job B) a profit seeker C)
someone who seeks opportunity D) an initiator E) a calculated risk taker 18) An individual who organizes
the resources to produce goods and services to earn a profit, but also runs the risk of failure refers to: 18)
______ A) capitalism B) socialism C) entrepreneurs D) communism E) natural resources 19) A command
economy is: 19) ______ A) one where there is a mix of government regulation and free enterprise B) one in
which the market directs what is made and in what quantity C) one in which the government controls all or
most factors of production D) one in which customers demand what new products are to be made E) the
type of economy found in Russia 20) The economic system in which producers and consumers control
production and allocation decisions through supply and demand is called: 20) ______ A) communism B)
privatization C) centrally planned economy D) socialism E) market economy 21) You are involved in a
debate about communism. You must know that a major drawback to communism as an economic system is
that: 21) ______ A) communism is becoming less attractive B) government operated enterprises are
inefficient because of political considerations C) individuals receive economic benefits according to their
needs D) government control of the factors of production is only temporary E) individuals contribute
according to their ability 22) Command economies are most likely to be found in: 22) ______ A) capitalistic

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societies B) western Europe C) communist and socialist nations D) the newly emerging Asian countries E)
Japan 23) Which of the following is not true in the communist economic system? 23) ______ A) centralized
planning emphasis on capital equipment and military hardware has caused shortages of consumer goods B)
communist nations often expand their overall production rapidly because of centralized planning C) the
government owns and operates all the industries D) there is limited or no free enterprise E) most
government-operated enterprises are inefficient 24) Stanislav lives in a country where all the sources of
production are owned by the government. The economy system in his country is most likely: 24) ______ A)
socialism B) fascism C) privatization D) communism E) mixed market 25) Which of the following is not
true? 25) ______ A) The United States is not a purely capitalistic economy. B) No country in the world has a
purely communistic economy. C) No country in the world has a purely capitalistic economy. D) No country
in the world has a purely socialistic economy. E) The People's Republic of China and Cuba are purely
communistic economies today. 26) What do the nations of Cuba, North Korea, Vietnam, and the People's
Republic of China have in common? 26) ______ A) mixed economy B) socialism C) communism D)
mercantilism E) market economy 27) An economic system that permits private ownership and control of
small businesses but where the government is in control of large critical industries is known as: 27) ______ A)
socialism B) mercantilism C) capitalism D) a mixed economy E) communism 28) Socialism is best
described as: 28) ______ A) a kind of command economy in which the government owns and operates large
critical industries B) an economic system with elements of both a planned economy and a market economy
C) an economy that is free from any regulation or planning D) a market economy in which markets decide
what, when, and how much to produce E) a kind of command economy in which the government owns and
operates all industries 29) Socialist economies can stifle economic growth because: 29) ______ A) they
encourage unionization of employees B) socialist economies actually have the best record, and they do not
stifle economic growth C) they have too few regulations concerning product safety D) management
positions in state-controlled industries are often filled on the basis of political considerations E) they are
actually command economies 30) Market economies have all of the following characteristics, except that
they: 30) ______ A) require government intervention in order to prosper B) encourage entrepreneurship by
offering profits as an incentive C) rely on markets, not governments, to decide what, when, and for whom to
produce D) allow customers free choice E) allow businesses to charge whatever they want for their products
and services 31) Market economies are the best for small businesses because they: 31) ______ A) protect
small businesses from the power of large corporations B) allow small businesses to fail C) provide small
businesses with lots of government assistance and protection D) provide a central plan in which small
businesses can easily prosper E) allow the business to do whatever it wants 32) B2B has become popular in
strategic business thinking. Which of the following statements is NOT true about B2B? 32) ______ A) B2B
transactions exceed $200 billion. B) B2C transactions far exceed B2B transactions in dollar value. C) B2B
activity is good news for consumers because it helps to make businesses more efficient, which will allow
them to reduce their costs. That, in turn, will allow them to reduce prices. D) B2B stands for business-to-
business electronic commerce. E) B2B involves businesses joining together to create e-commerce
companies. 33) Canada is home to a(n) ________ economy. 33) ______ A) command B) fair C) mixed D)
market E) oligopolistic 34) The role of government in our economic system includes all of the following
except: 34) ______ A) innovator B) taxation agent C) competitor D) regulator E) customer 35) Sandy is
responsible for monitoring compliance to regulations in her company. She needs to know that the important
areas of regulation are: 35) ______ A) protecting competition, consumer protection and environmental
regulations B) protecting competition, consumer protection, social goals and protecting the environment C)
protecting social goals, ecological regulations and shareholder rights D) protecting competition and
environmental regulations E) protecting shareholder rights and business law 36) John is interested in
preserving social goals in Canada. However, he is not certain which goals are subject to regulation. You point
out that the social goals that governments regulate are the following except: 36) ______ A) decent pensions
B) employment insurance C) public health-care system with wide access D) motor vehicles E) a safe
workplace 37) Madeline is responsible for answering questions about what her company can do under the
Competition Act. Which one of the following is allowed under the Act? 37) ______ A) the return of surpluses
by credit unions to its members B) forming a merger or a monopoly that lessens competition C) giving
selective allowances and rebates to cover advertising expenses to specific retailers D) pricing products
unreasonably low to eliminate competition E) refusal to sell to a retailer who, in turn, sells the product
significantly below the suggested retail price 38) Why are income taxes called progressive taxes? 38)
______ A) because poorer people spend proportionally more on necessities B) the more one makes, a greater
proportion of additional amounts is paid in income taxes C) the more one progresses in a company, the
more one pays in income taxes D) the more one makes, the higher the income tax rate that is applied to
one's entire income E) because it increases total consumption 39) Why are sales taxes called regressive
taxes? 39) ______ A) because the more one makes, the lower the rate of sales tax that is applied to one's

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purchases B) because they discourage the purchase of some products C) because it applies to sales taxes
D) because poorer people pay a higher percentage of income than richer people E) because food and drugs
are often exempt 40) Incentive programs are designed to: 40) ______ A) encourage businesses to make
unprofitable products B) create "corporate welfare bums" C) encourage businesses to locate in depressed
parts of the country D) encourage families to move to depressed parts of the country E) encourage families
to have more babies 41) The textbook describes three main ways in which business can influence
government policy. They are: 41) ______ A) advertising, trade associations, political contributions B) political
contributions, letters to the editors of newspapers, advertising C) lobbyists, political contributions,
advertising D) advertising, lobbyists, trade associations E) trade associations, lobbyists, letters to the
editors of newspapers 42) A semiconductor firm is opening a new manufacturing facility in Canada and is
looking for ways to better influence government policy in their industry. It could: 42) ______ A) obtain a
government contract for supplies and equipment B) keep manufacturing plants in Canada C) obtain export
business for the new facility D) hire a lobbyist or join a trade association E) assure worker safety in business
facilities 43) As part of the Lobbyist Registration Act, lobbyists are required to: 43) ______ A) register with
the Department of Consumer and Commercial Relations B) register with the Department of Lobbyists C)
register with the Department of Finance D) register with the Registrar of Lobbyists E) attend 50 percent of
all sessions in the House of Commons 44) The microelectronics manufacturers want to set up a trade
association. They need to know that trade associations do all but which one of the following? 44) ______ A)
arrange trade shows B) act as an industry lobby to influence legislation C) allocate markets for their
members D) publish newsletters featuring articles on new products E) conduct training programs relevant
to the industry 45) The economic term "demand" refers to: 45) ______ A) the willingness and ability of
buyers to purchase a product or service B) the willingness of sellers to sell goods C) the stock exchange D)
the willingness and ability of producers to purchase a product or service E) the willingness of government to
sell goods and services 46) The law of demand states: 46) ______ A) that demand and supply meet at an
equilibrium point B) buyers will purchase more of a product as the price falls C) producers will offer more of
a product as the price rises D) producers will offer more of a product as the price falls E) buyers will
purchase more of a product as the price rises 47) The law of supply states: 47) ______ A) that demand and
supply meet at an equilibrium point B) producers will offer more of a product as the price falls C) producers
will offer more of a product as the price rises D) buyers will purchase more of a product as the price rises E)
buyers will purchase more of a product as the price falls 48) Ian, the owner of 5-for-1 Pizza, has noticed that
when he increases the price of his pizzas by $2.00, the number of pizzas that he sells drops by 30 percent.
Ian has discovered: 48) ______ A) the supply curve B) the law of demand C) the law of supply D) the law of
supply and demand E) the demand curve 49) Kristine discovered that when she dropped the price of her
paintings, more people were asking her to create paintings for them. Kristine is experiencing: 49) ______ A)
market price variations B) mercantilism C) economic justice D) the law of demand E) the law of supply
50) A demand and supply schedule: 50) ______ A) is a formula by which one determines market equilibrium
B) is the contractual agreement made between the buyer and seller C) describes the supply for a product
D) allows one to assess the relationship between different levels of demand and supply at different prices E)
describes the demand for a product 51) Which term is used to identify the willingness and ability of buyers
to purchase a product? 51) ______ A) wealth B) prosperity C) obligation D) demand E) profits 52) A major
producer of automobile batteries notes that the price of batteries has risen over each of the past three years.
The firm decides to expand its battery production. This illustrates: 52) ______ A) the law of supply and
demand B) the law of demand C) the law of market price D) the law of supply E) the law of equilibrium
53) In the production of wheat, the law of demand: 53) ______ A) reflects the farmer's desire to offer more
wheat as demand increases B) occurs when farmers produce a bumper crop of wheat C) states that buyers
will purchase more wheat as the price decreases D) reflects the farmer's desire to increase wheat
production E) refers to the exchange process between the farmer and the buyer of wheat 54) A major
producer of televisions is experiencing difficulty in selling its products. A corporate decision is made to lower
the price, anticipating that sales will increase as a result of the lower price. This illustrates: 54) ______ A) the
law of supply and demand B) the law of supply C) the law of equilibrium D) the law of demand E) the law
of market price 55) The point at which the quantity of a product or service demanded is the same as the
quantity supplied is called: 55) ______ A) the surplus point B) the equilibrium point C) the shortage point D)
the supply point E) the demand point 56) On a graph showing the supply curve and the demand curve, the
point at which the two curves intersect is called: 56) ______ A) the junction B) the equilibrium price C) the
crossover D) the law of demand E) the break-even point 57) At the point where the supply curve crosses
the demand curve on a graph, it could be said that: 57) ______ A) all products offered for sale will be sold B)
a surplus will result C) no sales will be made D) a shortage will result E) no profits will be made 58) The
points on a curve showing the relationship between the price of a good or service and the quantity of that
good or service willing to be produced is known as the: 58) ______ A) demand curve B) variable price curve
C) supply curve D) equilibrium curve E) balance curve 59) The points on a curve showing the relationship
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