Economics for Business Review Questions
Course Introduction
Economics for Business provides students with an understanding of fundamental economic principles and how they are applied in business decision-making. The course covers key concepts such as supply and demand, market structures, pricing strategies, and the impact of government policies on businesses. Emphasis is placed on both microeconomic and macroeconomic factors that influence the business environment, including consumer behavior, production costs, economic growth, inflation, and globalization. By analyzing real-world case studies and current economic trends, students learn to apply economic reasoning to solve business problems and make informed strategic decisions.
Recommended Textbook Principles of Microeconomics 7th Canadian Edition by McKenzie Mankiw
Available Study Resources on Quizplus
22 Chapters
4636 Verified Questions
4636 Flashcards
Source URL: https://quizplus.com/study-set/1448
Page 2
Chapter 1: Ten Principles of Economics
Available Study Resources on Quizplus for this Chatper
218 Verified Questions
218 Flashcards
Source URL: https://quizplus.com/quiz/28739
Sample Questions
Q1) Murray receives $100 as a birthday gift.In deciding how to spend the money,he narrows his options down to four choices: A,B,C,and D.Each option costs $100,but Murray values each option differently.Finally,he decides on C.What is the opportunity cost of C
A)the value to him of the option he would have chosen if C was not available
B)the value to him of options A, B, and D combined
C)$300
D)$100
Answer: A
Q2) Which activity will most likely result in an external benefit
A)a student buys a deck of cards to play solitaire in her dorm room
B)a group of children plant a vegetable garden on a vacant lot in their neighbourhood
C)an executive purchases a book to read on a business trip
D)a 10-year-old buys new Nikes with his allowance money he has saved
Answer: B
Q3) Productivity is the primary determinant of a country's living standards.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Thinking Like an Economist
Available Study Resources on Quizplus for this Chatper
239 Verified Questions
239 Flashcards
Source URL: https://quizplus.com/quiz/28740
Sample Questions
Q1) What is the x-coordinate
A)the first number of an ordered pair, which represents the point's horizontal location
B)the second number of an ordered pair, which represents the point's horizontal location
C)the first number of an ordered pair, which represents the point's vertical location
D)the second number of an ordered pair, which represents the point's vertical location
Answer: A
Q2) The country of Econoland produces two goods: textbooks and widgets.Last year,it produced 300 textbooks and 600 widgets.This year,it produced 350 textbooks and 700 widgets.Given no other information,which of the following could NOT explain the change
A)Econoland experienced a reduction in unemployment.
B)Econoland experienced an improvement in widget-making technology.
C)Econoland acquired more resources.
D)Econoland experienced a high level of emigration out of the country.
Answer: D
To view all questions and flashcards with answers, click on the resource link above.
Chapter 3: Interdependence and the Gains From Trade
Available Study Resources on Quizplus for this Chatper
207 Verified Questions
207 Flashcards
Source URL: https://quizplus.com/quiz/28741
Sample Questions
Q1) Which of the following do economists generally support A)trade restrictions
B)government management of trade
C)export subsidies
D)free international trade
Answer: D
Q2) Refer to Figure 3-3.Suppose that Ben and Jerry have both decided to produce at point A on their production possibilities frontiers.What can we infer from this information A)that this is not an efficient combination for neither Ben nor Jerry
B)that Ben and Jerry are both allocating 1/2 their time to the production of each good C)that no other production point is as efficient for both Ben and Jerry to produce as point A
D)that the two must be trading with each other Answer: B
Q3) Some countries win in international trade,while other countries lose.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
5
Chapter 4: The Market Forces of Supply and Demand
Available Study Resources on Quizplus for this Chatper
351 Verified Questions
351 Flashcards
Source URL: https://quizplus.com/quiz/28742
Sample Questions
Q1) What will happen to the equilibrium price and quantity of new cars if the price of gasoline rises,the price of steel rises,public transportation becomes cheaper and more comfortable,and auto workers negotiate higher wages
A)price will fall and the effect on quantity is ambiguous
B)price will rise and the effect on quantity is ambiguous
C)quantity will fall and the effect on price is ambiguous
D)quantity will rise and the effect on price is ambiguous
Q2) Market demand is given as Q<sub>D </sub>= 300 - 3P.Market supply is given as Q<sub>S </sub>= 2P + 100.If price increases from $40 to $45,what is the price elasticity of demand
A)0.4
B)0.8
C)1.3
D)1.8
Q3) Refer to the Figure 4-5.Which of the following is shown in Graph C
A)a decrease in demand
B)a decrease in the number of sellers
C)an increase in supply
D)an increase in input prices
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Elasticity and Its Application
Available Study Resources on Quizplus for this Chatper
230 Verified Questions
230 Flashcards
Source URL: https://quizplus.com/quiz/28743
Sample Questions
Q1) If the quantity supplied responds only slightly to changes in price,what can be said about supply
A)Supply is said to be elastic.
B)Supply is said to be perfectly elastic.
C)Supply is said to be inelastic.
D)Supply is said to be unit elastic.
Q2) Refer to Figure 5-7.What areas represent the total revenue at P
A)A + B
B)A + C
C)B + D
D)C + D
Q3) Why could the discovery of a new hybrid wheat lower farmers' revenue
A)because the demand for wheat is inelastic
B)because the demand for wheat is elastic
C)because the supply of wheat is elastic
D)because the supply of wheat is inelastic
Q4) Necessities tend to have price inelastic demands,whereas luxuries have price elastic demands.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Supply, demand, and Government Policies
Available Study Resources on Quizplus for this Chatper
248 Verified Questions
248 Flashcards
Source URL: https://quizplus.com/quiz/28744
Sample Questions
Q1) Although lawmakers designed the burden of the EI payroll tax to be split evenly between workers and firms,what do labour economists believe
A)The labour market is too distorted by the tax and should be eliminated.
B)Firms bear most of the burden of the tax.
C)Lawmakers may have achieved their goal because statistics show that the tax burden is currently equally divided.
D)Workers bear most of the burden of the tax.
Q2) Do minimum-wage laws in Canada vary by provinces
A)No.All provinces have legislation that establishes the same minimum wage as the federal law.
B)Yes.All provinces have legislation that establishes different minimum-wage rates.
C)Yes.The federal law has set lower minimum-wage rates in all territories.
D)No.The federal law has set higher minimum-wage rates for inexperienced workers across all provinces.
Q3) Most economists are in favour of price controls as a way of allocating resources in the economy.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: Consumers, producers, and the Efficiency of Markets
Available Study Resources on Quizplus for this Chatper
216 Verified Questions
216 Flashcards
Source URL: https://quizplus.com/quiz/28745
Sample Questions
Q1) What does the "invisible hand" refer to
A)the marketplace guiding the self-interests of market participants into promoting general economic well-being
B)the marketplace as a place where government looks out for the interests of individual participants in the market
C)the equity that results from market forces allocating the goods produced in the market
D)the automatic maximization of consumer surplus in free markets
Q2) Refer to Table 7-4.At the equilibrium price,what would total surplus be
A)$18
B)$24
C)$48
D)$72
Q3) If Jadelyn sells a bracelet for $30,and her producer surplus from the sale is $21,what must her cost have been
A)$9
B)$21
C)$30
D)$51
Page 9
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Application: the Costs of Taxation
Available Study Resources on Quizplus for this Chatper
222 Verified Questions
222 Flashcards
Source URL: https://quizplus.com/quiz/28746
Sample Questions
Q1) Refer to Figure 8-6.What would the total surplus before the tax be
A)$200
B)$250
C)$300
D)$350
Q2) If a tax is imposed on the buyer of a product,what is the effect on the demand curve
A)It shifts downward by the amount of the tax.
B)It shifts upward by the amount of the tax.
C)It shifts downward by less than the amount of the tax.
D)It shifts upward by more than the amount of the tax.
Q3) During Ronald Reagan's first term in office,income tax rates were reduced significantly.What was the result
A)Income tax collections declined.
B)Income tax revenue increased.
C)The Laffer curve was demonstrated to be essentially correct.
D)The government experienced budget surpluses for four consecutive years.
Q4) The most important tax in the Canadian economy is the corporate profit tax.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Application: International Trade
Available Study Resources on Quizplus for this Chatper
182 Verified Questions
182 Flashcards
Source URL: https://quizplus.com/quiz/28747
Sample Questions
Q1) If a tariff is placed on watches,the price of both domestic and imported watches will rise by the amount of the tariff.
A)True
B)False
Q2) Refer to Figure 9-2.What is the increase in total surplus in China because of trade
A)$500
B)$800
C)$1000
D)$1100
Q3) Refer to Figure 9-11.What is the amount of revenue collected by the government from the tariff
A)$200
B)$400
C)$600
D)$800
Q4) In a two-country world,the opening of free trade does not make everyone in the two countries better off.Why should we promote international trade
Q5) How is an import quota similar to,and different than,an equivalent tariff
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Externalities
Available Study Resources on Quizplus for this Chatper
210 Verified Questions
210 Flashcards
Source URL: https://quizplus.com/quiz/28748
Sample Questions
Q1) What is the difference between a corrective tax and pollution permits
A)A corrective tax sets the price of pollution, and permits set the quantity of pollution.
B)A corrective tax provides a more efficient outcome than permits.
C)A corrective tax sets the quantity of pollution, and permits set the price of pollution.
D)Permits provide a more efficient outcome than a corrective tax.
Q2) What do externalities cause markets to do
A)fail to allocate resources efficiently
B)cause price to be different than the equilibrium price
C)benefit producers at the expense of consumers
D)cause markets to operate more equitably
Q3) Why are public policy solutions such as corrective taxes and subsidies preferred over regulatory policies?
Q4) What will internalizing a negative externality cause the supply curve of an industry to do
A)shift to the right
B)shift to the left
C)expand
D)remain unchanged
To view all questions and flashcards with answers, click on the resource link above.
12
Chapter 11: Public Goods and Common Resources
Available Study Resources on Quizplus for this Chatper
173 Verified Questions
173 Flashcards
Source URL: https://quizplus.com/quiz/28749
Sample Questions
Q1) Studies have determined that the probability of a worker dying from exposure to a hazardous chemical used in the production of diet soft drinks is 0.0005.The cost of imposing a regulation that would ban this chemical is $18 million.If each person saved has a value equal to $10 million,how many people must the policy affect for benefits to exceed costs
A)1301
B)1801
C)2501
D)3601
Q2) When something of value has no price attached to it,such as a public good,what will likely happen
A)Externalities will be present.
B)The good will be completely used up.
C)Only those who are better off have to pay.
D)Private companies will eventually produce the product and the good will no longer be free.
Q3) Why do salmon populations face the threat of extinction while goldfish populations are in no such danger
Q4) Can we use cost and benefit analysis to evaluate human life and how
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: The Design of the Tax System
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/28750
Sample Questions
Q1) Tim earns income of $60,000 per year and pays $21,000 per year in taxes.Tim paid 20 percent in taxes on the first $30,000 he earned.What was the marginal tax rate on the second $30,000 he earned
A)20 percent
B)30 percent
C)50 percent
D)70 percent
Q2) What results when taxes are imposed on a commodity
A)There is never a deadweight loss.
B)Some consumers alter their consumption by not purchasing the taxed commodity.
C)Tax revenue will rise by the amount of the tax multiplied by the before-tax level of consumption.
D)Taxes will make the consumers who purchase the commodity worse off but not the consumers who do not purchase the commodity.
Q3) Which country has the largest tax burden
A)France
B)Italy
C)Germany
D)Canada
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: The Costs of Production
Available Study Resources on Quizplus for this Chatper
209 Verified Questions
209 Flashcards
Source URL: https://quizplus.com/quiz/28751
Sample Questions
Q1) Refer to Scenario 13-5.In producing the 5000 staplers,what was the firm's average fixed cost
A)$3
B)$4
C)$5
D)$6
Q2) How are explicit costs calculated
A)They require an outlay of money by the firm.
B)They include all of the firm's opportunity costs.
C)They include income that is forgone by the firm's owners.
D)They include interest earned from abandoned investment opportunities.
Q3) From the information in Table 13-6,what can we conclude regarding the firm's long-run cost
A)Tom's factory exhibits diseconomies of scale for output between 10 and 30.
B)Tom's average-total-cost curve is L-shaped.
C)Tom's factory exhibits constant returns to scale.
D)Tom's average-total-cost curve is U-shaped.
Q4) Accountants keep track of the money that flows into and out of firms.
A)True
B)False
Page 15
To view all questions and flashcards with answers, click on the resource link above.
Chapter 14: Firms in Competitive Markets
Available Study Resources on Quizplus for this Chatper
261 Verified Questions
261 Flashcards
Source URL: https://quizplus.com/quiz/28752
Sample Questions
Q1) Which expression is correct for a competitive firm
A)Profit = Total revenue - Total variable cost
B)Marginal revenue = (Change in total revenue) ÷ (Change in quantity of output)
C)Average revenue = Total revenue ÷ Marginal revenue
D)Total revenue = Marginal revenue + Average revenue
Q2) What happens to the long-run equilibrium in the competitive market
A)In long-run equilibrium, marginal firms make a positive economic profit.
B)To maximize profit, firms should produce at a level of output where price equals marginal revenue.
C)The amount of gold in the world is limited; therefore, the gold jewellery market probably has a long-run supply curve that is upward sloping.
D)Long-run supply curves are typically less elastic than short-run supply curves.
Q3) The goods offered for sale in a competitive market are largely the same.As a result,what do we expect in the market
A)There will be few sellers in the market.
B)There will be few buyers in the market.
C)Buyers will have market power.
D)Sellers will have little reason to charge less than the going market price.
To view all questions and flashcards with answers, click on the resource link above.
16
Chapter 15: Monopoly
Available Study Resources on Quizplus for this Chatper
239 Verified Questions
239 Flashcards
Source URL: https://quizplus.com/quiz/28753
Sample Questions
Q1) A monopolist faces market demand given by P = 60 - Q.For this market,MR = 60 - 2Q and MC = Q.What is the deadweight loss due to the monopoly
A)$100
B)$200
C)$300
D)$400
Q2) A monopolist faces market demand given by P = 200 - Q.For this market,MR = 2002Q and MC = 3Q.What is the deadweight loss due to the monopoly
A)$0
B)$100
C)$200
D)$400
Q3) What is the defining characteristic of a natural monopoly? Give an example of a natural monopoly.
Q4) The amount of power that a monopoly has is a function of whether there are close substitutes for its product.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Monopolistic Competition
Available Study Resources on Quizplus for this Chatper
191 Verified Questions
191 Flashcards
Source URL: https://quizplus.com/quiz/28754
Sample Questions
Q1) Refer to Scenario 16-2.If Firm B decides to advertise its product,what can it expect to happen
A)It will incur a loss of $36 million per year.
B)It will have a profit of $96 million per year.
C)It will have a profit of $84 million per year.
D)It will exit the industry.
Q2) In monopolistically competitive markets,what is the role that economic losses play
A)They signal some incumbent firms to exit the market.
B)They signal new firms to enter the market.
C)They are maintained through government-imposed barriers to exit.
D)They show that they are price takers in the market.
Q3) Suppose that monopolistically competitive firms in a certain market are earning positive profits.What happens in the transition from this initial situation to a long-run equilibrium
A)The number of firms in the market decreases.
B)Each incumbent firm experiences a decrease in demand for its product.
C)Marginal revenue will increase.
D)Average revenue will increase.
Q4) List five goods that are sold in a monopolistically competitive market.
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Oligopoly
Available Study Resources on Quizplus for this Chatper
198 Verified Questions
198 Flashcards
Source URL: https://quizplus.com/quiz/28755
Sample Questions
Q1) Which characterization typically applies to monopolistically competitive firms
A)many firms selling products that are similar, but not identical
B)many firms selling identical products
C)a few firms selling products that are similar, but not identical
D)a few firms selling highly different products
Q2) As the number of firms in an oligopoly grows larger,what does an oligopolistic market look more and more like
A)a competitive market
B)a monopoly
C)a duopoly
D)a monopolistically competitive market
Q3) What are the two types of imperfectly competitive markets
A)monopoly and monopolistic competition
B)monopoly and oligopoly
C)monopolistic competition and oligopoly
D)monopolistic competition and cartels
Q4) When an oligopolist decreases production,it is likely that the output effect is less than the price effect.
A)True
B)False
Page 19
To view all questions and flashcards with answers, click on the resource link above.
Chapter 18: The Markets for the Factors of Production
Available Study Resources on Quizplus for this Chatper
180 Verified Questions
180 Flashcards
Source URL: https://quizplus.com/quiz/28756
Sample Questions
Q1) Refer to Scenario 18-1.If the price of fresh Pacific salmon were to decrease significantly,what would Madison most likely do
A)She would reduce her demand for crewmembers.
B)She would try to increase her catch to make up for lost revenue.
C)She would become a seller in at least one factor market.
D)She would shut down her fishing business.
Q2) Which of the following best describes the rental price of land
A)the price paid for ownership of the land
B)the price paid to use the land over a specified time period
C)the opportunity cost of the land for alternative uses
D)the market price of the land for the rental period
Q3) Which of the following best describes the rental price of capital
A)the value of the capital to the firm
B)the price paid to use capital for a limited time period
C)the price paid for ownership of the capital
D)the interest rate of the capital paid by the firm
Q4) Describe the difference between a diminishing marginal product of labour and a negative marginal product of labour.Why would a profit-maximizing firm generally choose to operate where marginal product of labour is decreasing (but not negative)?
To view all questions and flashcards with answers, click on the resource link above. Page 20
Chapter 19: Earnings and Discrimination
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/28757
Sample Questions
Q1) What have economists who study the value of skills in the labour markets documented
A)a decrease in the earnings gap between low-skill and high-skill workers over the past 27 years in the United States but not in Canada
B)an increase in the earnings gap between low-skill and high-skill workers over the past 27 years in Canada, but not in the United States
C)a decrease in the earnings gap between low-skill and high-skill workers over the past 27 years in both Canada and the United States
D)an increase in the earnings gap between low-skill and high-skill workers over the past 27 years in the United States, but not in Canada
Q2) Where is the return on investment in human capital observed
A)in the wage rate of university professors
B)in the wage differential between workers
C)in the high school dropout rate in inner-city urban school districts
D)in the low wages of educated factory workers
Q3) Based on Canadian studies,what are the possible reasons that Francophone players are underrepresented in NHL?
To view all questions and flashcards with answers, click on the resource link above.
Page 21
Chapter 20: Income Inequality and Poverty
Available Study Resources on Quizplus for this Chatper
163 Verified Questions
163 Flashcards
Source URL: https://quizplus.com/quiz/28758
Sample Questions
Q1) Refer to Figure 20-1.If the government imposes a minimum wage below Wo,which effect is it likely to have
A)It will increase employment to a level above Q .
B)It will reduce employment to a level below Q .
C)The market equilibrium wage will reset to the level of minimum wage.
D)The market equilibrium wage will be Wo.
Q2) We are sitting in an "original position" behind a "veil of ignorance." What political philosophy is this statement attributed to
A)utilitarianism
B)liberalism
C)libertarianism
D)monetarism
Q3) What is NOT an example of in-kind transfers
A)food stamps
B)healthcare
C)the Earned Income Tax Credit
D)housing vouchers
Q4) Explain the concept of diminishing marginal utility and describe the role that it plays in the utilitarian argument for redistribution of income.
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: The Theory of Consumer Choice
Available Study Resources on Quizplus for this Chatper
191 Verified Questions
191 Flashcards
Source URL: https://quizplus.com/quiz/28759
Sample Questions
Q1) Delilah knows that she will ultimately face retirement.Assume that Delilah will experience two periods in her life,one in which she works and earns income and one in which she is retired and earns no income.Delilah can earn $250,000 during her working period and nothing in her retirement period.She must both save and consume in her work period with an interest rate of 10 percent on savings.Assume that Delilah decides to consume $150,000 in the work period.How much will she consume in her retirement period
A)$100,000
B)$110,000
C)$125,000
D)$250,000
Q2) In the work-leisure model,the income effect of a wage increase is when the worker chooses which option
A)She wishes to work less.
B)She wishes to work more.
C)She is indifferent between working more or less.
D)She wishes to work more but be less productive.
Q3) Evaluate the following statement: "Warren Buffet is the third richest person in the world.He doesn't face any constraint on his ability to purchase commodities he wants."
To view all questions and flashcards with answers, click on the resource link above.
Page 23
Chapter 22: Frontiers of Microeconomics
Available Study Resources on Quizplus for this Chatper
141 Verified Questions
141 Flashcards
Source URL: https://quizplus.com/quiz/28760
Sample Questions
Q1) The moral hazard problem and the desire of firms to lessen that problem serve as a plausible explanation for a firm paying above-equilibrium wages to its workers.
A)True
B)False
Q2) Evidence points to the fact that,in the real world,people appear to care about fairness under what circumstance
A)only when it coincides with their own self-interest
B)only when it coincides with their determination to be consistent over time
C)even when it does not coincide with their own self-interest
D)even when it coincides with their own self-interest over time
Q3) An insurance company that writes automobile policies tries to separate safe drivers from risky drivers by offering policies that feature different deductibles and different premiums.What is this an example of
A)screening
B)signing
C)underwriting
D)signalling
Q4) Explain the Condorcet paradox.To which type of voting system does it apply?
To view all questions and flashcards with answers, click on the resource link above.
Page 24