Question 1

Suppose the equilibrium point of 5-for-1 Pizza is 2000 pizzas per week and the price is $10.00 per pizza.If the owner decides to make 2200 pizzas and sell them at the same price,what is the likely outcome?

Accepted Answer

The business will have a surplus.

Question 2

Barrett Corp.has introduced a new smart phone feature that is very popular.What should Barrett do to maximize profits?

Accepted Answer

Produce more units of the phone.

Question 3

Joe's Pizza introduces a new variety of a personal pizza.Which of the following actions would most likely prevent a surplus or a shortage of the personal pizzas in the first week?

Accepted Answer

Estimate the market price of the personal pizza.

Question 4

A few years ago,General Motors decided to develop a new car model.Sally checked it out at her local dealership and decided to buy one.We can conclude that

Accepted Answer

both General Motors and Sally exercised their freedom of choice.

Question 5

Tim won $50 000 on a Lotto 649 ticket and now he wants to buy a Harley Davidson.The term used to identify his willingness and ability to purchase the motorcycle is

Accepted Answer

demand.

Question 6

Suppose that in 2012 a Canadian city experiences a big increase in the amount of commercial space that is available for rent.What is most likely to occur?

Accepted Answer

Rents will go down as long as there is not a big increase in demand.

Question 7

Other things being equal,a company would have the most power to raise prices if the product it is selling is

Accepted Answer

life-saving drugs.

Question 8

Executives at Kelsey Corp.are arguing about whether or not they should increase prices for the company's products by 15-20 percent.Which of the following could be used as an argument to increase prices?

Accepted Answer

Demand for Kelsey's products is increasing.

Question 9

How would a cell phone manufacturer most effectively determine the market price of a new line of cell phones?

Accepted Answer

Arrange to sell the phones in a number of diverse auctions.

Question 10

Private enterprise requires which four elements to function effectively?

Accepted Answer

Private property rights,freedom of choice,profits,and competition

Question 11

If the market for chocolate was at the equilibrium point and suddenly half of the chocolate in the world disappeared,what would be the immediate effect?

Accepted Answer

The price would increase due to a shortage.

Question 12

In economic terms,a "market" is

Accepted Answer

an exchange process between sellers and buyers.

Question 13

What is likely to happen when demand for a commodity is high?

Accepted Answer

All of these statements are correct.

Question 14

If the number of pizza restaurants in a region increases from 50 to 100 in the last year,what is the likely result?

Accepted Answer

There will be an increase in supply,which will lead to a decrease in the equilibrium price.

Question 15

Equilibrium in the market is attained when

Accepted Answer

the laws of supply and demand interact to set the price and quantity of a product at which buyers and sellers agree.

Question 16

Executives at Kelsey Corp.are arguing about whether or not they should increase prices for the company's products by 15-20 percent.Which of the following could be used as an argument against increasing prices?

Accepted Answer

Market research reveals that demand for Kelsey's products is very much affected by the price.

Question 17

5-for-1 Pizza is operating at the point where the supply curve intersects the demand curve.If the owner decides to increase the price and not change the production level,what will result?

Accepted Answer

A surplus

Question 18

A demand and supply schedule

Accepted Answer

allows a person to assess the relationship between different levels of demand and supply at different prices.

Question 19

At the point where the supply curve crosses the demand curve on a graph,it could be said that

Accepted Answer

all products offered for sale will be sold.

Question 20

An exchange process between buyers and sellers of a particular good or service is known as

Accepted Answer

a market.

Quiz 1: Understanding the Canadian Business System