Question 1

In general terms, full employment means that:

Accepted Answer

Full employment does not mean zero unemployment; rather, it means that the only remaining unemployment is frictional, which is the time period individuals spend searching for a job or transitioning from one job to another. Cyclical unemployment (related to economic downturns) and structural unemployment (when workers' skills do not match job openings) are minimized or eliminated at full employment.

Question 2

A downward change in the economy can result in an increase in:

Accepted Answer

A downward change in the economy, such as a recession or a slowdown, typically leads to a decrease in demand for goods and services, which can cause firms to reduce their production and lay off workers. This type of unemployment, resulting from a decline in economic activity or a business cycle, is known as cyclical unemployment. Therefore, choice A is the best answer. Structural unemployment refers to mismatches between the skills or qualifications of job seekers and the requirements of available jobs, and is not directly related to the business cycle. Seasonal unemployment refers to temporary joblessness that occurs due to predictable changes in the demand for labor over the course of a year. Frictional unemployment is the result of people resetting their careers or looking for new jobs voluntarily, and is considered a normal part of the job search process.

Question 3

An oligopoly is a form of competition in a particular market where:

Accepted Answer

An oligopoly is a market structure characterized by a few dominant firms selling differentiated products. These firms can influence prices and output levels, and they may engage in tactics like price fixing or collusion to maintain their market power. Option A describes perfect competition, option C describes a monopoly, and option D describes monopolistic competition.

Question 4

Cola manufacturers such as Coke and Pepsi are an example of this type of competition:

Accepted Answer

Cola manufacturers such as Coke and Pepsi have a significant market share and can heavily influence the market, but there are still other competitors present in the market. This is an example of an oligopoly, where a few large firms dominate the market.

Question 5

Potatoes grown in P.E.I. are sold across Canada and compete in this form of competition:

Accepted Answer

Potatoes are a common agricultural product with many producers, leading to a market structure of pure competition where no single producer can influence the market price.

Question 6

When jobs available do not correspond with the skills of the labour force, an increase in _____________ can occur.

Accepted Answer

When jobs available do not correspond with the skills of the labour force, it leads to structural unemployment. This occurs due to changes in the structure of the economy or a mismatch between available jobs and the skills of the workforce. Cyclical unemployment occurs due to fluctuations in the business cycle, seasonal unemployment occurs due to seasonal changes in demand for labour, and frictional unemployment occurs due to transitional issues such as workers searching for new jobs or taking time to relocate.

Question 7

When only frictional unemployment exists, and no structural or cyclical unemployment is present, there is:

Accepted Answer

When only frictional unemployment exists, and there is no structural or cyclical unemployment, it is called full employment. In this scenario, everyone who is willing and able to work is employed, and the unemployment rate is at the natural rate of unemployment, which is a level where there is no inflationary or deflationary pressure in the economy. Seasonal unemployment is a type of cyclical unemployment that occurs due to seasonal changes in demand, so it is not relevant in this scenario. The total natural unemployment in a region would include frictional, structural, and cyclical unemployment, and is therefore not applicable in this case where only frictional unemployment is present.

Question 8

There are lots of retail stores to buy running shoes in Canada. Walmart, Payless Shoes, Sporting Life, Sears, Athletic World, and the Running Room are just a few examples. There are a variety of prices, styles and designs to choose from. This is an example of:

Accepted Answer

This is an example of monopolistic competition as there are multiple competitors with differentiated products (different prices, styles, and designs) but they are all selling the same type of product (running shoes).

Question 9

The construction industry exists around the year, but housing construction is most active in the spring and summer. When housing contractors are unemployed in the winter, they are likely affected by:

Accepted Answer

The housing construction industry experiences a seasonal fluctuation in demand, with the highest demand in the spring and summer months. Contractors who are unable to find work during the winter months are experiencing seasonal unemployment, which is a type of unemployment that is caused by seasonal fluctuations in demand for labor.

Question 10

Facebook is a U.S. online social networking site that advertizes to millions of its members across Canada, the United States and abroad. The U.S. gross domestic product (GDP) would include ________ from Facebook.

Accepted Answer

The U.S. GDP includes the value of goods and services produced within the United States, so it would only include sales earned in the U.S.

Quiz 6: Section 3: Does It Matter: Society, Ethics and Business