Question 1

The major factor determining whether a firm or a market coordinates a particular set of activities is

Accepted Answer

A) cost. 
B) a sale. 
C) depreciation. 
D) the size of the market. 
E) the number of workers. 
A) cost. 
B) a sale. 
C) depreciation. 
D) the size of the market. 
E) the number of workers.

Question 2

Where the Herfindahl-Hirschman Index is less than 1,000,the market is regarded as

Accepted Answer

A) a monopoly. 
B) an oligopoly. 
C) competitive. 
D) regulated. 
E) none of the above. 
A) a monopoly. 
B) an oligopoly. 
C) competitive. 
D) regulated. 
E) none of the above.

Question 3

The profits of a sole proprietorship are

Accepted Answer

A) taxed twice. 
B) subject to a corporate tax. 
C) not taxed. 
D) exempt from taxation. 
E) treated as the owner's income. 
A) taxed twice. 
B) subject to a corporate tax. 
C) not taxed. 
D) exempt from taxation. 
E) treated as the owner's income.

Question 4

When Jitters Coffee Company,Inc.,can lower the cost of packaging a kilogram of coffee by doubling the quantity packaged each day,it is achieving

Accepted Answer

A) economies of scope. 
B) lower transactions costs 
C) economies of scale. 
D) efficient team production. 
E) all of the above 
A) economies of scope. 
B) lower transactions costs 
C) economies of scale. 
D) efficient team production. 
E) all of the above

Question 5

Which of the following pairs of market types are both characterized by having a large number of firms?

Accepted Answer

A) oligopoly and monopolistic competition 
B) monopoly and oligopoly 
C) perfect competition and monopolistic competition 
D) monopoly and monopolistic competition 
E) perfect competition and oligopoly 
A) oligopoly and monopolistic competition 
B) monopoly and oligopoly 
C) perfect competition and monopolistic competition 
D) monopoly and monopolistic competition 
E) perfect competition and oligopoly

Question 6

Normal profit is the ________.Normal profit ________ part of a firm's opportunity cost because ________.

Accepted Answer

A) return that an entrepreneur can expect to receive on the average;is;it is the cost of a foregone alternative, which is running another firm 
B) profit used by the Canada Revenue Agency to calculate tax owing;is;part of it must be paid to the government and is no longer available to the entrepreneur 
C) profit used by the Canada Revenue Agency to calculate tax owing;is;it is paid in cash 
D) return that an entrepreneur can expect to receive on the average;is not;it is not paid in cash 
E) profit used by the Canada Revenue Agency to calculate tax owing;is;it includes depreciation 
A) return that an entrepreneur can expect to receive on the average;is;it is the cost of a foregone alternative, which is running another firm 
B) profit used by the Canada Revenue Agency to calculate tax owing;is;part of it must be paid to the government and is no longer available to the entrepreneur 
C) profit used by the Canada Revenue Agency to calculate tax owing;is;it is paid in cash 
D) return that an entrepreneur can expect to receive on the average;is not;it is not paid in cash 
E) profit used by the Canada Revenue Agency to calculate tax owing;is;it includes depreciation

Question 7

Which one of the following is included in the implicit rental rate of capital?

Accepted Answer

A) economic depreciation 
B) the cost of electricity 
C) the cost of raw materials 
D) the cost of low-skilled labour 
E) the cost of heating 
A) economic depreciation 
B) the cost of electricity 
C) the cost of raw materials 
D) the cost of low-skilled labour 
E) the cost of heating

Question 8

The four-firm concentration ratio tells us the percentage of ________ for the four largest firms in an industry.

Accepted Answer

A) employment 
B) accounting profit 
C) economic profit 
D) the value of sales 
E) physical output 
A) employment 
B) accounting profit 
C) economic profit 
D) the value of sales 
E) physical output

Question 9

The implicit rental rate

Accepted Answer

A) is the firm's opportunity cost of using the capital it owns. 
B) is paid with cash. 
C) has two components: economic depreciation and foregone interest. 
D) both A and C are correct. 
E) both B and C are correct. 
A) is the firm's opportunity cost of using the capital it owns. 
B) is paid with cash. 
C) has two components: economic depreciation and foregone interest. 
D) both A and C are correct. 
E) both B and C are correct.

Question 10

A four-firm concentration ratio that exceeds 60 percent indicates

Accepted Answer

A) a perfectly competitive market. 
B) a monopolistically competitive market. 
C) a monopoly. 
D) an oligopoly. 
E) a competitive market. 
A) a perfectly competitive market. 
B) a monopolistically competitive market. 
C) a monopoly. 
D) an oligopoly. 
E) a competitive market.

Question 11

Which one of the following statements about the implicit rental rate of capital is true?

Accepted Answer

A) It is the market value of capital. 
B) It is the opportunity cost to a firm of using its own capital. 
C) It includes normal profit. 
D) It is the amount paid for the use of land or buildings. 
E) It is the depreciated value of capital. 
A) It is the market value of capital. 
B) It is the opportunity cost to a firm of using its own capital. 
C) It includes normal profit. 
D) It is the amount paid for the use of land or buildings. 
E) It is the depreciated value of capital.

Question 12

Economic profit equals total revenue minus

Accepted Answer

A) the cost of resources bought in the market. 
B) the implicit rental rate. 
C) the opportunity cost of production. 
D) the cost of resources supplied by the owner. 
E) the cost of resources owned by the firm. 
A) the cost of resources bought in the market. 
B) the implicit rental rate. 
C) the opportunity cost of production. 
D) the cost of resources supplied by the owner. 
E) the cost of resources owned by the firm.

Question 13

In a partnership,each partner is legally liable for

Accepted Answer

A) all the debts of the partnership. 
B) the fraction of the debts corresponding to the fraction of ownership. 
C) 50 percent of the debt. 
D) all debts of the partnership limited by the personal wealth of the partner. 
E) an amount of debt limited to the amount of the partner's investment in the partnership. 
A) all the debts of the partnership. 
B) the fraction of the debts corresponding to the fraction of ownership. 
C) 50 percent of the debt. 
D) all debts of the partnership limited by the personal wealth of the partner. 
E) an amount of debt limited to the amount of the partner's investment in the partnership.

Question 14

Team production is

Accepted Answer

A) a production process with decreasing costs per unit as production increases. 
B) a production process with individuals specializing in mutually supportive tasks. 
C) the production that results from market activity. 
D) the cost of organizing an assembly line. 
E) the lower costs resulting from organizing a firm versus using the market to coordinate production. 
A) a production process with decreasing costs per unit as production increases. 
B) a production process with individuals specializing in mutually supportive tasks. 
C) the production that results from market activity. 
D) the cost of organizing an assembly line. 
E) the lower costs resulting from organizing a firm versus using the market to coordinate production.

Question 15

To produce a unit of output,Alphaworks uses 10 hours of labour and 5 kilograms of material.Betaworks uses 5 hours of labour and 10 kilograms of material,and Gammaworks uses 10 hours of labour and 10 kilograms of material.If labour costs $10 per hour and material costs $5 per kilogram,which firm is economically efficient?

Accepted Answer

A) Alphaworks only 
B) Betaworks only 
C) Gammaworks only 
D) Alphaworks and Betaworks 
E) Alphaworks and Gammaworks 
A) Alphaworks only 
B) Betaworks only 
C) Gammaworks only 
D) Alphaworks and Betaworks 
E) Alphaworks and Gammaworks

Question 16

Which of the following industries in Canada has the highest four-firm concentration ratio?

Accepted Answer

A) audio and video equipment 
B) clothing 
C) bakery items 
D) fabrics 
E) tobacco products 
A) audio and video equipment 
B) clothing 
C) bakery items 
D) fabrics 
E) tobacco products

Question 17

Firms cope with uncertainty and incomplete information by using

Accepted Answer

A) sole proprietorship, limited liability, and market coordination. 
B) ownership, incentive pay, and long-term contracts. 
C) team production, economies of scale, and transactions costs. 
D) the market, the firm, and internal organization. 
E) team production, economies of scale, and transaction costs. 
A) sole proprietorship, limited liability, and market coordination. 
B) ownership, incentive pay, and long-term contracts. 
C) team production, economies of scale, and transactions costs. 
D) the market, the firm, and internal organization. 
E) team production, economies of scale, and transaction costs.

Question 18

Marc bought a new car last year for $10,000.He can now sell the car for $8,500.To buy this year's model of the same car he would have to pay $11,000.What is the implicit rental rate using the car for one year at a zero percent interest rate?

Accepted Answer

A) $2,500 
B) $3,500 
C) $1,000 
D) $10,000 
E) $1,500 
A) $2,500 
B) $3,500 
C) $1,000 
D) $10,000 
E) $1,500

Question 19

A firm that uses the latest technology ________ technologically efficient because ________.

Accepted Answer

A) is not necessarily;the firm might not use the least amount of inputs to produce a given output 
B) is not necessarily;new technology is more expensive than old technology 
C) is;efficiency is about costs rather than when the technology was developed 
D) is;new technology isn't developed unless it is efficient 
E) is;most consumers want access to the latest technology 
A) is not necessarily;the firm might not use the least amount of inputs to produce a given output 
B) is not necessarily;new technology is more expensive than old technology 
C) is;efficiency is about costs rather than when the technology was developed 
D) is;new technology isn't developed unless it is efficient 
E) is;most consumers want access to the latest technology

Question 20

Use the table below to answer the following questions.
Table 10.4.1
  
-Refer to Table 10.4.1.The four-firm concentration ratio for taco stands is

Accepted Answer

A) 15 percent. 
B) 100 percent. 
C) 80 percent. 
D) 33 percent. 
E) 30 percent. 
A) 15 percent. 
B) 100 percent. 
C) 80 percent. 
D) 33 percent. 
E) 30 percent.

Exam 10: Organizing Production

The major factor determining whether a firm or a market coordinates a particular set of activities is

Where the Herfindahl-Hirschman Index is less than 1,000,the market is regarded as

The profits of a sole proprietorship are

When Jitters Coffee Company,Inc.,can lower the cost of packaging a kilogram of coffee by doubling the quantity packaged each day,it is achieving

Which of the following pairs of market types are both characterized by having a large number of firms?

Normal profit is the ________.Normal profit ________ part of a firm's opportunity cost because ________.

Which one of the following is included in the implicit rental rate of capital?

The four-firm concentration ratio tells us the percentage of ________ for the four largest firms in an industry.

The implicit rental rate

A four-firm concentration ratio that exceeds 60 percent indicates

Which one of the following statements about the implicit rental rate of capital is true?

Economic profit equals total revenue minus

In a partnership,each partner is legally liable for

Team production is

Which of the following industries in Canada has the highest four-firm concentration ratio?

Firms cope with uncertainty and incomplete information by using

Marc bought a new car last year for $10,000.He can now sell the car for $8,500.To buy this year's model of the same car he would have to pay $11,000.What is the implicit rental rate using the car for one year at a zero percent interest rate?

A firm that uses the latest technology ________ technologically efficient because ________.

Use the table below to answer the following questions. Table 10.4.1 -Refer to Table 10.4.1.The four-firm concentration ratio for taco stands is

What Is Economics?

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

Measuring GDP and Economic Growth

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers: The Keynesian Model

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

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Normal profit is the .Normal profit part of a firm's opportunity cost because .

A firm that uses the latest technology technologically efficient because .