Test Bank all Chapters

Business Essentials, 9th Canadian Edition, 9e Ronald Ebert, Ricky Griffin, Frederick Starke, George Dracopoulos

(Test Bank all Chapters)

• / 4

1 Copyright © 2020 Pearson Canada Inc.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?"

• Total money taken in by a corporation
• Increases in income from year to year
• Increases in a corporation's stock price
• Revenue generated by goods and services
• 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?

• They do not seek to make a profit.
• They deal with people, not things.
• Their organizational boundaries exclude business firms.
• They do not produce goods or services.
• They are more important to society than business firms.

Answer: A

Diff: 2 Type: MC Page Ref: 4

Skill: Comprehension

Objective: 1.1

• / 4

2 Copyright © 2020 Pearson Canada Inc.4) Examples of businesses include all of the following except

• local supermarkets.
• one-person businesses, like barbershops.
• non-profit organizations.
• large corporations like Canadian Pacific or Alcan Aluminum.
• 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.

• Businesses
• Labour unions
• Non-profit organizations
• Canadian provincial governments
• Charities

Answer: A

Diff: 1 Type: MC Page Ref: 5

Skill: Comprehension

Objective: 1.1

6) Not-for-profit organizations

• are content with small profits, whereas business firms want large profits.
• are more important than business firms in the Canadian economy.
• use the funds from government grants or from the sale of goods or services to provide service

to the public.

• sell only services, not goods.
• 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

• the importance of natural resources.
• the principle of specialization of labour.
• the difference between information and all the other factors of production.
• the importance of profit in market economies.
• the importance of government regulation.

Answer: C

Diff: 2 Type: MC Page Ref: 5

Skill: Comprehension

Objective: 1.2

• / 4

3 Copyright © 2020 Pearson Canada Inc.8) The key difference between economic systems is the different ways in which they manage

• the factors of production.
• the transportation of goods within their borders.
• government rules and regulations.
• the payment of workers.
• 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

• an agreement between countries that deals with free trade.
• the way in which a nation allocates its resources among its citizens.
• a government decree that requires certain goods and services to be provided.
• a long-standing agreement between citizens and governments on how an economy is run.
• 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 market.
• economic trade.
• mercantilism.
• supply utility.
• 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?

• Support free enterprise in every way possible
• Allocate all or most factors of production
• Encourage citizens to buy shares of stock in small companies
• Keep its control activities to a minimum
• Direct workers to start their own small businesses

Answer: B

Diff: 2 Type: MC Page Ref: 5

Skill: Knowledge

Objective: 1.2

• / 4