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Chapter 1

MGTA01H3 Chapter 1: MGTA01 Chapter One Quiz (interim).docx

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Bill Mc Conkey

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MGTA01 CH1 Quiz
1. "Mary's Variety" is a corner store located in Markham. In 2013 it sold $200,000 worth of
goods to local people wanting milk, newspapers, cigarettes, pop, etc.Mary's Variety paid various
suppliers $100,000 for the goods that it sold. The store paid $30,000 in rent, and $40,000 to two
students who worked in the store part-time. All of the other expenses (fees, taxes, insurance,
etc.) totaled $10,000. From this information we can say that:
a Mary's Variety made a profit of $100,000
b Mary's Variety made a profit of $20,000
c Mary's Variety made a profit of $200,000
d Mary's Variety made a profit of $60,000
2. An industry is dominated by a small number (3 or 4) very large suppliers. These
businesses watch each other closely, matching price increases and decreases, in an attempt to
hold on to their existing customers and gain new ones. The "degree of competition" in this
industry is:
a pure, or perfect, competition
b monopolistic competition
c oligopoly
d monopoly
3. You are driving your car along a lonely country road, late at night. Suddenly, the light on
your gas tank gauge comes on - you are almost out of gas! About 5 minutes later, you drive
through a small town. It has only one gas station, but it's open. The sign indicates that gas is
selling for $1.95/litre - about 50% more than you'd pay in the city. At that time, and place, the
market for gasoline is:
a perfectly competitive
b monopolistically competitive
c an oligopoly
d a monopoly
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