Q: Which formula correctly represents the calculation of profit?

$$\text{Profit} = \text{Revenue} - \text{Costs}$$

Question 1

A company has total revenues of $$500,000 and total costs of 350$$,000. What is the company's profit? Use the formula $$	ext{Profit} = 	ext{Revenue} - 	ext{Costs}.$$

Accepted Answer

$$\150$$,000$

Question 2

Which of the following best describes a market economy?

Accepted Answer

Supply and demand determine prices, and private individuals own the factors of production.

Question 3

If a business is experiencing a shortage in the market, what is likely to happen to the price of its product?

Accepted Answer

The price will increase.

Question 4

Which of the following is NOT a characteristic of perfect competition?

Accepted Answer

High barriers to entry.

Question 5

A Canadian company pays $$200,000 in rent, 100$$,000 in salaries, and $$50,000 in supplies. If its total revenue is 400$$,000, what is its profit or loss? Use $$	ext{Profit} = 	ext{Revenue} - 	ext{Costs}.$$

Accepted Answer

$$\50$$,000$ profit

Question 6

Which of the following is an example of an oligopoly in Canada?

Accepted Answer

The Canadian banking sector

Question 7

In a command economy, who primarily decides what goods and services will be produced?

Accepted Answer

The government

Question 8

Which of the following is a government-provided essential service in Canada?

Accepted Answer

Postal service

Question 9

If the supply of a product increases while demand remains constant, what will likely happen to the equilibrium price?

Accepted Answer

It will decrease.

Question 10

Which formula correctly represents the calculation of profit?

Accepted Answer

$$	ext{Profit} = 	ext{Revenue} - 	ext{Costs}$$

Question 11

Which of the following best describes monopolistic competition?

Accepted Answer

Few to many sellers, differentiated products, some control over price

Question 12

Which of the following is a restrictive tax imposed by the Canadian government?

Accepted Answer

Tax on cigarettes

Question 13

A monopoly is most likely to exist in which of the following industries?

Accepted Answer

Utilities such as water supply

Question 14

Which of the following is NOT a factor of production?

Accepted Answer

Advertising

Question 15

If a business operates in a market with many sellers and no control over price, which market structure does it belong to?

Accepted Answer

Perfect competition

Question 16

Which of the following is a real-world example of a duopoly?

Accepted Answer

Two major companies controlling the commercial aircraft market

Question 17

Which of the following is a role of government in the Canadian business system?

Accepted Answer

Providing incentives to stimulate business growth

Question 18

If the government wants to protect consumers and promote healthy competition, which role is it performing?

Accepted Answer

Regulator

Question 19

Which of the following is an example of a mixed market economy?

Accepted Answer

Canada

Question 20

A business in a monopolistic competition market structure can differentiate its product by:

Accepted Answer

Offering unique features or branding

Microeconomics Study Guide: Canadian Business System and Market Structures

Study Guide - Practice Questions

Study Guide - Flashcards