Deck 10: Industrial Organization in Canada

Question 1

The simplest form of business enterprise is:

A) sole proprietorship.
B) partnership.
C) Crown corporation.
D) corporation.

Answer 1

sole proprietorship.

Question 2

Which of the following is an advantage of a proprietorship?

A) flexible management
B) unlimited expertise and skill
C) greater ability to get funds
D) limited personal liability

Answer 2

flexible management

Question 3

Which of the following is a disadvantage of a proprietorship?

A) complex management
B) unlimited expertise and skill
C) income earned received by shareholders
D) unlimited personal liability

Answer 3

unlimited personal liability

Question 4

One advantage of a partnership over a sole proprietorship is:

A) ease of management.
B) ease of formation.
C) great ability to get funds.
D) limited liability.

Question 5

Under which form of business enterprise is it easiest to acquire large amounts of money in order to start up the business?

A) corporation
B) partnership
C) sole proprietorship
D) agency Crown corporation

Question 6

The main disadvantage of a corporation is:

A) inability to borrow money.
B) slow decision making.
C) in the rules and regulations that must be followed.
D) its existence after the death of a shareholder.

Question 7

One advantage of a corporation over a partnership is:

A) it is a less expensive form of business enterprise.
B) ease of formation.
C) limited liability.
D) ease of management.

Question 8

Which of the following is not a type of Crown corporation?

A) proprietary corporation
B) departmental corporation
C) agency corporation
D) limited corporation

Question 9

The type of Crown corporation most like a private-sector corporation is the:

A) independent Crown corporation.
B) agency corporation.
C) proprietary corporation.
D) departmental corporation.

Question 10

The type of crown corporation that performs a variety of administrative, regulatory, and supervisory functions is:

A) an agency corporation.
B) a departmental corporation.
C) a proprietary corporation.
D) limited corporation.

Question 11

The type of crown corporation that performs a variety of commercial and management functions for the government is:

A) a departmental corporation.
B) limited corporation.
C) a proprietary corporation.
D) an agency corporation.

Question 12

The type of crown corporation that is expected to find itself is:

A) a departmental corporation.
B) an agency corporation.
C) limited corporation.
D) a proprietary corporation.

Question 13

An example of a department corporation is:

A) National Research Council.
B) Canada Post.
C) the Bank of Canada.
D) Canada Deposit Insurance Corporation.

Question 14

An example of an agency corporation is:

A) National Research Council.
B) Canada Post.
C) Canada Deposit Insurance Corporation.
D) the Bank of Canada.

Question 15

An example of a proprietary corporation is:

A) the Bank of Canada.
B) National Research Council.
C) Canada Deposit Insurance Corporation.
D) Canada Post.

Question 16

An example of a crown corporation that does not fall into the three main categories is:

A) Canada Deposit Insurance Corporation.
B) National Research Council.
C) Canada Post.
D) the Bank of Canada.

Question 17

Which of the following crown corporations are used by most provincial and local governments:

A) post office corporations.
B) farm credit corporations.
C) wheat board corporations.
D) electric utility corporations.

Question 18

Which of the following characteristics apply to perfect competition?

A) firms with market power
B) non-price competition occurs
C) barriers to entry exist
D) many small firms

Question 19

Which of the following characteristics apply to oligopoly?

A) firms with no market power
B) non-price competition occurs
C) many small firms
D) no barriers to entry exist

Question 20

Which of the following characteristics apply to both monopoly and oligopoly?

A) many small firms
B) firms with market power
C) non-price competition occurs
D) no barriers to entry exist

Question 21

Which of the following characteristics apply to both perfect competition and many differentiated sellers?

A) similar products
B) no barriers to entry exist
C) many small firms with market power
D) non-price competition occurs

Question 22

The competitive situation characterized by only a few firms is called:

A) a monopoly.
B) many differentiated sellers.
C) an oligopoly.
D) perfect competition.

Question 23

The competitive situation that is the most difficult for new firms to enter is:

A) perfect competition.
B) many differentiated sellers.
C) an oligopoly.
D) a monopoly.

Question 24

Restaurants in downtown Montreal are an example of which type of competitive situation?

A) perfect competition
B) oligopoly
C) monopoly
D) many differentiated sellers

Question 25

Corn farmers are an example of which type of competitive situation?

A) perfect competition
B) oligopoly
C) monopoly
D) many differentiated sellers

Question 26

Which of the following industries is the best example of an oligopoly?

A) banking
B) fast-food restaurants
C) cable television
D) blue jeans

Question 27

Which of the following industries is the best example of a monopoly?

A) steel
B) cable television
C) beer
D) automobiles

Question 28

Which of the following industries is the best example of many differentiated sellers?

A) banking
B) airlines
C) fast-food restaurants
D) electricity

Question 29

Which of the following industries is the best example of perfect competition?

A) steel
B) restaurants
C) hairdressers
D) wheat

Question 30

A grocery store in a town of 1000 is considered to operate as:

A) a perfectly competitive firm.
B) an oligopoly.
C) an industry with many differentiated sellers.
D) a monopoly.

Question 31

A grocery store in a town of 500 000 is considered to operate as:

A) an industry with many differentiated sellers.
B) a monopoly.
C) a perfectly competitive firm.
D) an oligopoly.

Question 32

All of the following will increase competition within an industry except:

A) exports.
B) technological change.
C) time.
D) wider geographic boundaries.

Question 33

What is the main commonalty that firms in inter-industry and intra-industry competition share?

A) They are affected by geographic boundaries.
B) They offer products that substitute for one another.
C) They both compete for the consumer's dollar.
D) They must consider international competition.

Question 34

The degree to which business activity in an industry is dominated by a few firms is called:

A) oligopoly.
B) concentration.
C) monopoly power.
D) arbitration.

Question 35

Which of the following is true regarding concentration ratios?

A) They are calculated on a regional and local basis.
B) They do not take into account expansion of industries.
C) They take into account transportation costs.
D) They take into account include imports.

Question 36

Which of the following examples would increase the concentration ratio for an industry?

A) product loyalty
B) lower transportation costs
C) lower product differentiation
D) industry expansion

Question 37

Which of the following examples would decrease the concentration ratio for an industry?

A) lower transportation costs
B) product loyalty
C) greater product differentiation
D) industry contraction

Question 38

Foreign portfolio investment into Canada involves:

A) the purchase of physical assets such as factories by foreigners.
B) ownership of debt instruments such as loans and debentures by residents of a foreign country.
C) managerial control of a business by people in a foreign country.
D) none of the above

Question 39

Which of the following cannot be considered a benefit of foreign ownership?

A) branch plants are usually small
B) makes the Canadian market more competitive
C) increases the level of productivity in Canada
D) provides access to the latest technological advances

Question 40

Which of the following cannot be considered to be a shortcoming of foreign investment?

A) if foreign investment simply substitutes for domestic investment, GDP may not increase
B) foreign subsidiaries may be subject to legislation passed in a foreign country
C) foreign branch plants operating in Canada may not be large enough to achieve the efficiencies associated with mass production
D) the presence of foreign firms in Canada may increase competition in the marketplace

Question 41

The role of the Foreign Investment Review Agency (FIFA) was:

A) to attract new investment to Canada.
B) to create access to foreign markets for Canadian firms.
C) to approve or reject new foreign investment in Canada.
D) to increase competition amongst foreign owned firms within Canada.

Question 42

The reason why the Foreign Investment Review Agency (FIFA) was dissolved in 1984 was because:

A) it did not attract new investment to Canada.
B) its rejection rate for foreign investment in Canada was too high.
C) its process was long and costly.
D) it hindered access to foreign markets for Canadian firms.

Question 43

The mandate of Investment Canada was:

A) to create access to foreign markets for Canadian firms.
B) to increase competition amongst foreign owned firms within Canada.
C) to attract new investment to Canada.
D) to approve or reject new foreign investment in Canada.

Question 44

In 2004, the country which made the most direct investment into Canada was:

A) Japan.
B) the United States.
C) the United Kingdom.
D) Mexico.

Question 45

The largest proportion of direct investment is in which of the following industries?

A) energy
B) construction
C) finance and insurance
D) electronic products

Question 46

Which of the following is true regarding foreign-owned resource companies operating in Canada?

A) They are more export oriented than Canadian manufacturers.
B) They are more technologically advanced than Canadian manufacturers.
C) They reduce competition for Canadian-controlled companies.
D) They export many of our resources to the parent company.

Question 47

Which of the following is true regarding foreign-owned manufacturers operating in Canada?

A) They reduce competition for Canadian-controlled companies.
B) They are more export oriented than Canadian manufacturers.
C) They export many of our resources to the parent company.
D) They are more technologically advanced than Canadian manufacturers.

Question 48

Canada's direct investment abroad has exceeded foreign investment in Canada since:

A) 1996
B) 2004
C) 1984
D) 2001