Question 1

A GlobeScan poll showed that the highest support for the free market economy was found in
A) Japan.
B) China.
C) the United States.
D) Canada.
E) Brazil.

Accepted Answer

China has often shown high levels of support for the free market economy in various international polls, including those conducted by GlobeScan. This might seem counterintuitive given its communist government, but economic reforms and rapid growth have fostered a positive view among its citizens towards market mechanisms.

Question 2

As a factor of production, labour includes
A) everyone in a business.
B) only non-unionized employees.
C) only unionized employees.
D) only lower-level managers, not upper-level managers.
E) only workers who do production work.

Accepted Answer

Labour as a factor of production includes everyone in a business, regardless of their role, union status, or level of management.

Question 3

Mexico allows producers and consumers to make production and allocation decisions through the mechanism of supply and demand. Such a system is called
A) socialism.
B) communism.
C) privatization.
D) nationalization.
E) a market economy.

Accepted Answer

Mexico's economic system is based on a market economy where decisions about production and allocation are made by producers and consumers through the mechanism of supply and demand. This means that the government does not heavily regulate or control the economy, but instead allows market forces to determine prices and quantities of goods and services. This is distinct from socialism and communism, which involve more government control and ownership of resources and means of production, and from privatization and nationalization, which involve transfer of ownership from public to private or vice versa.

Question 4

Which of the following statements is correct?
A) Sweden is the best example of a country with a pure socialist economy.
B) A GlobeScan poll found that the greatest support for the free market economy was found among the citizens of India.
C) The United States is a pure capitalist economy.
D) Many countries in the world have a purely communist economy.
E) Under socialism, smaller businesses are often privately owned.

Accepted Answer

Under socialism, smaller businesses are often privately owned.

Question 5

Socialist economies may stifle economic growth because
A) management positions in state-controlled industries are often filled on the basis of political considerations.
B) they have too few regulations concerning product safety.
C) they are found in countries where people don't have many skills.
D) they are usually found in countries with cold climates.
E) they encourage excessive unionization of employees.

Accepted Answer

In socialist economies, state-controlled industries often prioritize political connections over merit when filling management positions. This can result in less competent leaders and ultimately stifle economic growth.

Question 6

Which of the following is correct with respect to the factors of production?
A) The "labour" factor recognizes that it is importance to have labour unions to offset the power of management.
B) "Capital" is a more important factor than "labour."
C) As the Canadian economy has become larger and more complex, the importance of entrepreneurs has declined.
D) Unlike land, labour, and capital, information can be shared without being diminished.
E) Human resources is an example of the "natural resources" factor.

Accepted Answer

Unlike the other factors of production, information is not a finite resource and can be shared without being diminished. This is known as non-rivalry in consumption, meaning that one person's use of information does not preclude another's use.

Question 7

What is the difference between a command economy and a market economy?
A) A command economy is found only in communist countries, while a market economy is found only in capitalist countries.
B) A command economy is more efficient than a market economy.
C) A market economy gives greater "life satisfaction" to people.
D) A command economy relies on centralized government control of the factors of production, while in a market economy supply and demand determine production and allocation decisions.
E) There really are no significant differences between a command economy and a market economy.

Accepted Answer

A command economy is one in which the government controls the factors of production, determines what goods and services are produced, and controls their distribution. In contrast, a market economy is characterized by the operation of the laws of supply and demand, with little or no government intervention. Under a market economy, businesses are free to produce what they choose and set prices based on competitive forces. In summary, the primary difference between the two systems is the role of government in determining economic decisions.

Question 8

An economic system that permits private ownership and control of small businesses but where the government controls large critical industries is known as
A) a mixed economy.
B) socialism.
C) communism.
D) capitalism.
E) mercantilism.

Accepted Answer

Socialism is an economic system where the government controls major industries, while allowing private ownership of smaller businesses.

Question 9

Which country has a command economy?
A) Australia
B) Japan
C) Canada
D) Germany
E) North Korea

Accepted Answer

North Korea has a command economy, where the government controls all economic decisions and resource allocation.

Question 10

Command economies are most likely to be found in
A) the newly emerging economies of southeast Asia.
B) communist and socialist nations.
C) western European countries.
D) Japan.
E) Canada and the United States.

Accepted Answer

Command economies are often associated with communist and socialist nations that prioritize collective ownership and government control of economic activity.

Question 11

John lives in a country where producers and consumers control production, and where allocation decisions are made through the mechanism of supply and demand. John lives in a country with a ________ economy.
A) privatized
B) socialist
C) communist
D) market
E) nationalized

Accepted Answer

John lives in a market economy, where production and allocation decisions are made by producers and consumers based on supply and demand. A privatized economy refers to the transfer of ownership and control of public assets to the private sector. A socialist economy is characterized by state ownership and control of the means of production, distribution, and exchange. A communist economy is a type of socialist economy where the state owns and controls all economic resources and decision-making. A nationalized economy refers to the transfer of ownership and control of private assets to the state.

Question 12

A major drawback to communism as an economic system is that
A) government control of the factors of production is only temporary.
B) people don't like communism.
C) individuals contribute according to their ability.
D) individuals receive economic benefits according to their needs.
E) production of goods and services is inefficient because of the lack of a profit incentive.

Accepted Answer

Communism eliminates the profit incentive, which is a major motivation for individuals and businesses to produce goods and services efficiently. Without the drive to earn profits, the economy may become inefficient, leading to potentially lower production levels and supply shortages.

Question 13

The economic system in which producers and consumers control production and allocation decisions through supply and demand is called
A) a centrally planned economy.
B) privatization.
C) a market economy.
D) communism.
E) socialism.

Accepted Answer

A market economy is characterized by the interaction of buyers and sellers in determining the quantity, price, and distribution of goods and services. Producers and consumers control production and allocation decisions through the forces of supply and demand. In contrast, a centrally planned economy (A) is one where the government controls all aspects of production and distribution, while privatization (B) refers to the transfer of government-owned assets or services to the private sector. Communism (D) and socialism (E) are both economic systems that involve greater government control over production and distribution than a market economy.

Question 14

Natural resources as a factor of production for mining are a practical consideration when a mining company considers
A) the ease with which ore could be mined.
B) the number of miners available to mine the ore.
C) the amount of capital required to build the mine.
D) the profit that can be made from mining the ore.
E) the number of customers who want to buy ore.

Accepted Answer

The ease with which ore could be mined is a practical consideration because it determines the efficiency and cost-effectiveness of the mining operation. If the natural resources are difficult to access or extract, the mining company may have to spend more money on equipment and labor, which could negatively impact profitability.

Question 15

Which of the following is correct with regard to the issue of different economic systems?
A) There is a general consensus that command economies are more efficient than market economies because a centralized government can consider a wider range of economic factors when decisions are made.
B) In recent years, more and more countries have rejected communism and embraced more market-based economies.
C) Socialism is the most extensive command economic system because government owns all the major industries.
D) A GlobeScan poll of 20 000 people in 20 different countries showed that support for a free market economy was most pronounced in Singapore.
E) All of these are correct.

Accepted Answer

In recent years, many countries have moved away from command economies and embraced more market-based systems. Option A is incorrect, as there is no consensus that command economies are more efficient. Option C is also incorrect, as socialism does not necessarily also mean command economy. Option D may be true, but it is not necessarily the best answer as it only provides information on one country.

Question 16

An economy that has a strong central government that controls labour, capital, and natural resources and has few entrepreneurs is a
A) market economy.
B) command economy.
C) free-enterprise economy.
D) capitalist economy.
E) oligopolistic economy.

Accepted Answer

A command economy is characterized by a strong central government that controls the factors of production, including labor, capital, and natural resources. In a command economy, decisions about production and distribution are made by government officials rather than by market forces or individuals. Entrepreneurs have fewer opportunities to start businesses and make independent decisions in a command economy, as the government often monopolizes industries and resources.

Question 17

Which of the following is correct with regard to the communist economic system?
A) The centralized planning emphasis on capital equipment and military hardware has caused declines in the prices of consumer goods.
B) Government ownership of the means of production is only temporary.
C) Most government-operated enterprises are very efficient because of central planning.
D) Overall production expands rapidly because of central planning.
E) The government owns and operates all sources of production.

Accepted Answer

In a communist economic system, the government typically owns and operates all sources of production, aiming to eliminate private ownership and distribute resources equally among the population.

Question 18

Communism and socialism are
A) basic forms of market economies.
B) becoming more popular.
C) extreme opposites.
D) basic forms of command economies.
E) identical forms.

Accepted Answer

Communism and socialism are both basic forms of command economies, in which the government has control over the means of production and distribution of goods and services. They are typically opposed to market economies, which prioritize private ownership and competition. While communism and socialism share some similarities, such as a focus on collective ownership and the elimination of class distinctions, they are not identical and are often used to describe different political and economic systems.

Question 19

Stanislav lives in a country where all the factors of production are owned by the government. The economic system in his country is most likely
A) communism.
B) capitalism.
C) mixed market.
D) socialism.
E) it is not possible to tell with the information provided.

Accepted Answer

In a communist system, all factors of production are owned by the government or the people collectively. This system does not allow any private ownership of property or businesses, making it highly unlikely for any other economic system to exist in the described scenario.

Question 20

What can we say about the dollar value of business-to-business (B2B) transactions compared to the dollar value of business-to-consumer (B2C) transactions?
A) B2B transactions have a lower dollar value because there are fewer businesses than there are consumers.
B) The dollar value of B2B transactions exceeds that of B2C transactions.
C) The dollar value of B2B transactions must equal the dollar value of B2C transactions.
D) It is not possible to determine whether the dollar value of B2B transactions is less than or more than the dollar value of B2C transactions because of industrial secrecy.
E) It is not possible to determine whether the dollar value of B2B transactions is less than or more than the dollar value of B2C transactions because of data limitations.

Accepted Answer

B2B transactions typically involve larger amounts and volumes of goods or services compared to B2C transactions, which are usually smaller in scale. Therefore, B2B transactions have a higher dollar value than B2C transactions.

Quiz 1: Understanding the Canadian Business System

A GlobeScan poll showed that the highest support for the free market economy was found in

As a factor of production, labour includes

Mexico allows producers and consumers to make production and allocation decisions through the mechanism of supply and demand. Such a system is called

Which of the following statements is correct?

Socialist economies may stifle economic growth because

Which of the following is correct with respect to the factors of production?

What is the difference between a command economy and a market economy?

An economic system that permits private ownership and control of small businesses but where the government controls large critical industries is known as

Which country has a command economy?

Command economies are most likely to be found in

John lives in a country where producers and consumers control production, and where allocation decisions are made through the mechanism of supply and demand. John lives in a country with a ________ economy.

A major drawback to communism as an economic system is that

The economic system in which producers and consumers control production and allocation decisions through supply and demand is called

Natural resources as a factor of production for mining are a practical consideration when a mining company considers

Which of the following is correct with regard to the issue of different economic systems?

An economy that has a strong central government that controls labour, capital, and natural resources and has few entrepreneurs is a

Which of the following is correct with regard to the communist economic system?

Communism and socialism are

Stanislav lives in a country where all the factors of production are owned by the government. The economic system in his country is most likely

What can we say about the dollar value of business-to-business (B2B) transactions compared to the dollar value of business-to-consumer (B2C) transactions?