MGMT1000 Midterm Exam
Questions and Correct
Answers (Already Graded
A+)
A farmer who sells pineapples is looking to sell his crop for $1 a pound. He knows the
equilibrium price is $1.20 a pound but wants to sell his pineapples below this price
anyways. Using the law of supply and demand, what will happen to his profits? -
Answer- While he will sell more pineapples, his profits per pound will be less than the
equilibrium price, meaning there is no incentive to drop the price
A global consumer contains which of the following characteristics: - Answer-
Consumption of global brands
Lucy and Brianna can produce clocks or mugs at any given time. Given one day of
production, Lucy could produce 2 clocks or 20 mugs while Brianna could produce 5
clocks or 25 mugs. Who has the larger opportunity cost in producing clocks? - Answer-
Lucy has a larger opportunity cost
Brent's Bakery is known as the world's best bakery for tarts. It is also said that Brent's
Bakery holds a comparative advantage in producing its world-famous tarts. This means:
- Answer- Brent's Bakery can produce tarts at a lower opportunity cost than competitors
Brent's Bakery is known as the world's best bakery for tarts. It is also said that Brent's
Bakery holds an absolute advantage in producing its world-famous tarts. This means: -
Answer- Brent's Bakery can produce more tarts in less time than competitors
Stephanie and Katherine enjoy working outside and they both serve the same
customers. They typically alternate services which include cutting grass and trimming
hedges. When Stephanie cuts grass it takes her 45 minutes and when Katherine cuts
grass it takes her 1 hour. When Stephanie trims the hedges it takes her 30 minutes and
when Katherine trims the hedges it takes her 50 minutes. Which person has an absolute
advantage in cutting grass and which person has an absolute advantage in trimming
hedges? - Answer- Stephanie has an absolute advantage in providing both services
, The protection of domestic companies and industries is a primary trait of ________.
However, consumers ultimately pay the price when the cost of buying imported goods
increases and their _______ _______ decreases. - Answer- Tariffs; Purchasing Power
Taylor's Textiles is a company based out of Japan that exports a significant portion of its
product to the USA. The company has limits on how much they can export to the USA
because the USA wants to protect domestic markets from foreign competitors. What
type of barrier to trade is Taylor's Textiles facing? - Answer- Non-Tariff Barrier
Which of the following is a benefit of global trade: - Answer- All of the above
The practice of selling a product in a foreign market at an impossibly low price to
overpower competitors and gain control is called: - Answer- Predatory dumping
Taylor's Textiles is a company based out of Japan that exports a significant portion of its
product to the USA. The company has limits on how much they can export to the USA
because the USA wants to protect domestic markets from foreign competitors. This limit
is called a/an: - Answer- Import Quota
Increased productivity, low inflation and increased access to information for competing
countries are all benefits of: - Answer- Global trade
Country A can produce electronic devices much cheaper than Country B because of the
cost of labour. However, shipping from Country A to Country B is expensive because of
distance, causing prices to increase. This is an example of a/an ______ _______. -
Answer- Natural Barrier
When trading or investing within foreign countries, it is important to consider the level of
nationalism within a country because: - Answer- There may be certain restrictions on
foreign investment and trade that would sabotage your business in that market
To avoid foreign firms taking over domestic markets by pricing their product below the
cost of producing it, countries have created: - Answer- Anti-Dumping regulations
Political considerations, economic environments and cultural considerations represent: -
Answer- Threats & opportunities to the operation of a business
Kayla owns a business that makes custom dog collars for customers in Canada. Her
profits are taxed as personal income, she holds unlimited liability for the business, and
is responsible for the day-to-day operations. Her business is operating as a: - Answer-
Sole Proprietorship
Open membership, democratic control, economic participation, autonomy, and
education/training are all principles followed by: - Answer- Cooperatives
Questions and Correct
Answers (Already Graded
A+)
A farmer who sells pineapples is looking to sell his crop for $1 a pound. He knows the
equilibrium price is $1.20 a pound but wants to sell his pineapples below this price
anyways. Using the law of supply and demand, what will happen to his profits? -
Answer- While he will sell more pineapples, his profits per pound will be less than the
equilibrium price, meaning there is no incentive to drop the price
A global consumer contains which of the following characteristics: - Answer-
Consumption of global brands
Lucy and Brianna can produce clocks or mugs at any given time. Given one day of
production, Lucy could produce 2 clocks or 20 mugs while Brianna could produce 5
clocks or 25 mugs. Who has the larger opportunity cost in producing clocks? - Answer-
Lucy has a larger opportunity cost
Brent's Bakery is known as the world's best bakery for tarts. It is also said that Brent's
Bakery holds a comparative advantage in producing its world-famous tarts. This means:
- Answer- Brent's Bakery can produce tarts at a lower opportunity cost than competitors
Brent's Bakery is known as the world's best bakery for tarts. It is also said that Brent's
Bakery holds an absolute advantage in producing its world-famous tarts. This means: -
Answer- Brent's Bakery can produce more tarts in less time than competitors
Stephanie and Katherine enjoy working outside and they both serve the same
customers. They typically alternate services which include cutting grass and trimming
hedges. When Stephanie cuts grass it takes her 45 minutes and when Katherine cuts
grass it takes her 1 hour. When Stephanie trims the hedges it takes her 30 minutes and
when Katherine trims the hedges it takes her 50 minutes. Which person has an absolute
advantage in cutting grass and which person has an absolute advantage in trimming
hedges? - Answer- Stephanie has an absolute advantage in providing both services
, The protection of domestic companies and industries is a primary trait of ________.
However, consumers ultimately pay the price when the cost of buying imported goods
increases and their _______ _______ decreases. - Answer- Tariffs; Purchasing Power
Taylor's Textiles is a company based out of Japan that exports a significant portion of its
product to the USA. The company has limits on how much they can export to the USA
because the USA wants to protect domestic markets from foreign competitors. What
type of barrier to trade is Taylor's Textiles facing? - Answer- Non-Tariff Barrier
Which of the following is a benefit of global trade: - Answer- All of the above
The practice of selling a product in a foreign market at an impossibly low price to
overpower competitors and gain control is called: - Answer- Predatory dumping
Taylor's Textiles is a company based out of Japan that exports a significant portion of its
product to the USA. The company has limits on how much they can export to the USA
because the USA wants to protect domestic markets from foreign competitors. This limit
is called a/an: - Answer- Import Quota
Increased productivity, low inflation and increased access to information for competing
countries are all benefits of: - Answer- Global trade
Country A can produce electronic devices much cheaper than Country B because of the
cost of labour. However, shipping from Country A to Country B is expensive because of
distance, causing prices to increase. This is an example of a/an ______ _______. -
Answer- Natural Barrier
When trading or investing within foreign countries, it is important to consider the level of
nationalism within a country because: - Answer- There may be certain restrictions on
foreign investment and trade that would sabotage your business in that market
To avoid foreign firms taking over domestic markets by pricing their product below the
cost of producing it, countries have created: - Answer- Anti-Dumping regulations
Political considerations, economic environments and cultural considerations represent: -
Answer- Threats & opportunities to the operation of a business
Kayla owns a business that makes custom dog collars for customers in Canada. Her
profits are taxed as personal income, she holds unlimited liability for the business, and
is responsible for the day-to-day operations. Her business is operating as a: - Answer-
Sole Proprietorship
Open membership, democratic control, economic participation, autonomy, and
education/training are all principles followed by: - Answer- Cooperatives
