,Business Essentials, Canadian Edition, 9e (Ebert)
Chapter 1 Understanding the Canadian Business System
1.1 Multiple Choice Questions
1) Which of the following is the best definition of "profit?"
A) Total money taken in by a corporation
B) Increases in income from year to year
C) Increases in a corporation's stock price
D) Revenue generated by goods and services
E) Difference between revenues and expenses
Answer: E
Diff: 1 Type: MC Page Ref: 4
Skill: Knowledge
Objective: 1.1
2) This week, Abe's Muffler Shop had sales of $4000, employees were paid $1000, the cost of
goods was $1500, and rent was $500. Profit for the week was
A) $3000.
B) $1000.
C) $4000.
D) $2500.
E) $500.
Answer: B
Diff: 2 Type: MC Page Ref: 4
Skill: Application
Objective: 1.1
3) How are provincial universities in Canada different from business firms?
A) They do not seek to make a profit.
B) They deal with people, not things.
C) Their organizational boundaries exclude business firms.
D) They do not produce goods or services.
E) They are more important to society than business firms.
Answer: A
Diff: 2 Type: MC Page Ref: 4
Skill: Comprehension
Objective: 1.1
1
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,4) Examples of businesses include all of the following except
A) local supermarkets.
B) one-person businesses, like barbershops.
C) non-profit organizations.
D) large corporations like Canadian Pacific or Alcan Aluminum.
E) farms.
Answer: C
Diff: 2 Type: MC Page Ref: 4
Skill: Comprehension
Objective: 1.1
5) ________ produce most of the goods and services consumed in Canada.
A) Businesses
B) Labour unions
C) Non-profit organizations
D) Canadian provincial governments
E) Charities
Answer: A
Diff: 1 Type: MC Page Ref: 5
Skill: Comprehension
Objective: 1.1
6) Not-for-profit organizations
A) are content with small profits, whereas business firms want large profits.
B) are more important than business firms in the Canadian economy.
C) use the funds from government grants or from the sale of goods or services to provide service
to the public.
D) sell only services, not goods.
E) are not allowed to operate in the manufacturing sector.
Answer: C
Diff: 2 Type: MC Page Ref: 4
Skill: Comprehension
Objective: 1.1
7) If two people exchange an apple, they each still have just one apple, but if they exchange
ideas, they now each have two ideas. This is an illustration of
A) the importance of natural resources.
B) the principle of specialization of labour.
C) the difference between information and all the other factors of production.
D) the importance of profit in market economies.
E) the importance of government regulation.
Answer: C
Diff: 2 Type: MC Page Ref: 5
Skill: Comprehension
Objective: 1.2
2
Copyright © 2020 Pearson Canada Inc.
, 8) The key difference between economic systems is the different ways in which they manage
A) the factors of production.
B) the transportation of goods within their borders.
C) government rules and regulations.
D) the payment of workers.
E) the degree of competition that is allowed in various domestic industries.
Answer: A
Diff: 2 Type: MC Page Ref: 4-5
Skill: Knowledge
Objective: 1.2
9) An economic system is
A) an agreement between countries that deals with free trade.
B) the way in which a nation allocates its resources among its citizens.
C) a government decree that requires certain goods and services to be provided.
D) a long-standing agreement between citizens and governments on how an economy is run.
E) a large government department that oversees how the economy is running.
Answer: B
Diff: 2 Type: MC Page Ref: 4-5
Skill: Knowledge
Objective: 1.2
10) An exchange process between buyers and sellers of a particular good or service is known as
A) a market.
B) economic trade.
C) mercantilism.
D) supply utility.
E) bartering.
Answer: A
Diff: 2 Type: MC Page Ref: 6
Skill: Knowledge
Objective: 1.2
11) What does a planned economy rely on a centralized government to do?
A) Support free enterprise in every way possible
B) Allocate all or most factors of production
C) Encourage citizens to buy shares of stock in small companies
D) Keep its control activities to a minimum
E) Direct workers to start their own small businesses
Answer: B
Diff: 2 Type: MC Page Ref: 5
Skill: Knowledge
Objective: 1.2
3
Copyright © 2020 Pearson Canada Inc.
Chapter 1 Understanding the Canadian Business System
1.1 Multiple Choice Questions
1) Which of the following is the best definition of "profit?"
A) Total money taken in by a corporation
B) Increases in income from year to year
C) Increases in a corporation's stock price
D) Revenue generated by goods and services
E) Difference between revenues and expenses
Answer: E
Diff: 1 Type: MC Page Ref: 4
Skill: Knowledge
Objective: 1.1
2) This week, Abe's Muffler Shop had sales of $4000, employees were paid $1000, the cost of
goods was $1500, and rent was $500. Profit for the week was
A) $3000.
B) $1000.
C) $4000.
D) $2500.
E) $500.
Answer: B
Diff: 2 Type: MC Page Ref: 4
Skill: Application
Objective: 1.1
3) How are provincial universities in Canada different from business firms?
A) They do not seek to make a profit.
B) They deal with people, not things.
C) Their organizational boundaries exclude business firms.
D) They do not produce goods or services.
E) They are more important to society than business firms.
Answer: A
Diff: 2 Type: MC Page Ref: 4
Skill: Comprehension
Objective: 1.1
1
Copyright © 2020 Pearson Canada Inc.
,4) Examples of businesses include all of the following except
A) local supermarkets.
B) one-person businesses, like barbershops.
C) non-profit organizations.
D) large corporations like Canadian Pacific or Alcan Aluminum.
E) farms.
Answer: C
Diff: 2 Type: MC Page Ref: 4
Skill: Comprehension
Objective: 1.1
5) ________ produce most of the goods and services consumed in Canada.
A) Businesses
B) Labour unions
C) Non-profit organizations
D) Canadian provincial governments
E) Charities
Answer: A
Diff: 1 Type: MC Page Ref: 5
Skill: Comprehension
Objective: 1.1
6) Not-for-profit organizations
A) are content with small profits, whereas business firms want large profits.
B) are more important than business firms in the Canadian economy.
C) use the funds from government grants or from the sale of goods or services to provide service
to the public.
D) sell only services, not goods.
E) are not allowed to operate in the manufacturing sector.
Answer: C
Diff: 2 Type: MC Page Ref: 4
Skill: Comprehension
Objective: 1.1
7) If two people exchange an apple, they each still have just one apple, but if they exchange
ideas, they now each have two ideas. This is an illustration of
A) the importance of natural resources.
B) the principle of specialization of labour.
C) the difference between information and all the other factors of production.
D) the importance of profit in market economies.
E) the importance of government regulation.
Answer: C
Diff: 2 Type: MC Page Ref: 5
Skill: Comprehension
Objective: 1.2
2
Copyright © 2020 Pearson Canada Inc.
, 8) The key difference between economic systems is the different ways in which they manage
A) the factors of production.
B) the transportation of goods within their borders.
C) government rules and regulations.
D) the payment of workers.
E) the degree of competition that is allowed in various domestic industries.
Answer: A
Diff: 2 Type: MC Page Ref: 4-5
Skill: Knowledge
Objective: 1.2
9) An economic system is
A) an agreement between countries that deals with free trade.
B) the way in which a nation allocates its resources among its citizens.
C) a government decree that requires certain goods and services to be provided.
D) a long-standing agreement between citizens and governments on how an economy is run.
E) a large government department that oversees how the economy is running.
Answer: B
Diff: 2 Type: MC Page Ref: 4-5
Skill: Knowledge
Objective: 1.2
10) An exchange process between buyers and sellers of a particular good or service is known as
A) a market.
B) economic trade.
C) mercantilism.
D) supply utility.
E) bartering.
Answer: A
Diff: 2 Type: MC Page Ref: 6
Skill: Knowledge
Objective: 1.2
11) What does a planned economy rely on a centralized government to do?
A) Support free enterprise in every way possible
B) Allocate all or most factors of production
C) Encourage citizens to buy shares of stock in small companies
D) Keep its control activities to a minimum
E) Direct workers to start their own small businesses
Answer: B
Diff: 2 Type: MC Page Ref: 5
Skill: Knowledge
Objective: 1.2
3
Copyright © 2020 Pearson Canada Inc.
