CIA4U Exam Flashcards

Question

What is an Oligopoly? What is an Example?

Answer 1

When a few firms have a large majority of market share (e.g Market for mobile devices is dominated by Apple and Android)

Answer 2

1.High barriers to entry 2. These firms have similarly priced products, so they often compete via ‘non-price’ competition, competing on style, quality, location, and service, advertising.

Answer 3

A market controlled by one seller with a good or service that has no close substitutes. For example, Microsoft originally held a monopoly on computer operating systems, in 2024, their share is now 73%.

Answer 4

When it is more cost-effective to have just one large producer rather than several smaller competing firms. Example, sometimes it is cheaper to have just one electric supplier

Answer 5

1. Price Setters 2. Very high barriers to entry 3. Such barriers include (Government regulations, monopoly has control of resources, high startup costs like with nuclear power plants)

Answer 6

Perfect competition is a theoretical market structure where many companies sell identical products, and buyers and sellers have perfect information.

Answer 7

1.Super low barriers to entry 2.Price takers: Each firm must take the price set by the market 3. Buyers and sellers know the prices 4. Usually don't advertise because all of their products are identical to competitors so it just increases costs Exampes: (Tuna fisherman, grain producers)

Answer 8

Monopolistic competition is a market structure where many companies sell similar but distinct products. It is in between perfect competition and monopolies. Examples are coffee shops, grocery stores, hotels.

Answer 9

1. No one business has control of market prices, but some control over price 2.Many sellers and buyers 3.Price-makers: They can charge slightly higher prices, but not alot 4-They make profit in the short run, but not long run because when new firms enter, the demand falls, causing the equilibrium price to line up with the ATC, making no profit.

Answer 10

A sole proprietorship is an unincorporated business that is owned by one individual. All profits are yours to keep, and you are responsible for all debts and obligations of the business.

Answer 11

Non incorporated business that is created between two more people. In partnership, your financial resources are combined with those of your business partners, and put into the business. You and your partners would then share in the profits of the business according to any legal agreement you have drawn up.

Answer 12

lBusiness is a egal entity that is seperate and distinct from the owners. Corporations enjoy most of the rights and responsibilities that an individual possesses, like they can; sue and be sued, hire employees, own assets and pay taxes.

Answer 13

Private Limited Company: Companies that do not issue publically traded shares in Canada and are a huge part of the economy. Many are subsidaries of multinationals, or are family owned.

Answer 14

A government controlled exlusively by the wealthy, either directly or indirectly. A plutocracy effectively allows only the wealthy to rule.

Answer 15

In economics, Ceteris Paribus considers the effect of one economic variable on another, with all other factors that may affect the second variable held constant. It is a Latin phrase that means "All else being equal".

Answer 16

A fundamental principle in economics that states that at a higher price consumers will demand a lower quantity of a good.

Answer 17

All other factors being equal, as the price of a good or service increases, the quantity of goods that suppliers or services that suppliers offer will increase, and vice versa.

Answer 18

A) Maximum Output (All productive resources are fully employed) B)A point inside the curve is inneficient C)A point outside the graph is impossible

Answer 19

1.Change in taxation 2.Change in technology 3.Change in production and marketing costs 4.Changes in weather (Frost destroys crops) 5.Changes in the number of sellers (No one wants to sell home videos now)

Answer 20

1.Number of buyers (Population increase, advertising) 2.Income -Demand for luxury items increases with income 3.Consumer preference (increasing preference nutrition and environment acts) 4.Consumer expectations about future (covid toilet) 5.Price of other goods and services

Answer 21

If the price changes, the quantity demanded changes significantly. In other words, consumers are highly responsive to price changes. Many substitutes. (example: soft drink)

Answer 22

If the price changes, the quantity demanded changes very little or not at all. Consumers are not highly responsive to price changes. There are little to no substitutes and likely a ‘need’. (Example: drinking water).

Answer 23

Land: Natural resources that are used in the production of goods and services. Some examples of land are lumber, raw materials, fish, soil, minerals, and energy resources. Labour: Work effort used in the production of goods and services. Some examples are the number of workers and number of hours worked. Capital: Physical goods that are produced and used to produce other goods. Examples of capital would be machinery, technology, and tools such as computers; hammers; factories; robots; trucks, and trains used to transport goods; and other equipment employed in the production of a good or service. Some other people say Entrepreneurship

Answer 24

statements that describe opinions or how things ought to be

Answer 25

statements of fact or description of how something actually is.

Answer 26

A powerful central authority, usually the government, controls and regulates all economic activity. They control the price, distribution, and transactions of resources. The government owns all of the businesses and industries that provide goods and service to the citizens. These economies tend to be intertwined with socialism and communism.

Answer 27

The government has no economic control. Instead, the production of goods and services is determined by 'Supply and Demand'. Therefore, consumers determine both the price and demand of products. Moreover, this system is based on voluntary exchange (When buyers and sellers freely negotiate on prices). However, this system can result in successful people accumulating mass economic power and influence over others. Pure market economies don't actually exist because the government always has at least a little bit of control.

Answer 28

This system is the oldest and most basic. There is no government, as households often produce what they need themselves. (Hunt for food, search for water, ect). Additionally, people gather resources using a Bartering System (trading without using money). These economies produce resources through fishing, hunting, gathering, and agriculture/

Answer 29

This system is a mix of market and command economies, as it combines elements of socialism and capitalism. Some prices are determined by supply and demand, while others are fixed prices, set by the government. Most industries are private, but the government puts regulations over them and fully controls some industries (mainly public service).

Answer 30

Elasticity of Demand = (% Change in quantity demanded)/(% Change in price) Also, % change in quantity demanded = (change in quantity demanded) / (average quantity) And, % change in price = (change in price) / (average price)

Answer 31

If the answer has an absolute value greater than 1, the demand is elastic. In other words, the quantity changes faster than the price. If the value is less than 1, demand is inelastic. In other words, quantity changes slower than price. If the number is equal to 1, elasticity of demand is unitary. In other words, quantity changes at the same rate as price.

Answer 32

Perfectly inelastic, which means that an increase in price has no effect on quantity demanded whatsoever.

Answer 33

Perfectly elastic, if the price changes at all , no one will buy whatsoever. -infinite

Answer 34

False: The steeper the demand curve, the more inelastic it is.

Answer 35

True --> This is why gas stations don't have sales

Answer 36

When the price goes up, the total revenue box goes down. In contrast, when the price goes down, the total revenue box goes up.

Answer 37

B) It is Elastic

Answer 38

Minimum price companies are allowed to sell products

Answer 39

Maximum price companies are allowed to sell products

Answer 40

Externality: An impact, positive or negative, on any party not involved in a given economic transaction

Answer 41

Consumption Externality: Occur when a consumer's consumption or production activities impact others (Second hand smoking, or getting a vaccine also helps others due to a reduced change of getting sick from you) Production Externality: Occur when a producer's production activities impact others (Residents suffer bad air quality due to a factories burning fossil fuels, or building a subway station indirectly helps the real estate market).

Answer 42

Franchises: Is a type of license that a party (franchisee) acquires to allow them to access to a business’ (the franchisor) proprietary knowledge, processes and trademarks in order to allow the party to sell a product or provide a service under the business’ name.

Answer 43

English Economist. When there are too many people and not enough resources, the extra people will and should naturally die to balance the population and resources. Instead of preventing this death, we should facilitate it and make people live in poor living conditions to increase the death rate and balance the population. Additionally, People trying to help people’s health are bad because they are contributing to overpopulation.

Answer 44

Patents: the legal right to be the only person or company to make or sell a product for a particular number of years, or a document that gives you this right:.

Answer 45

Exchange of physically tangible goods between countries, involving the export, import, and re-export of goods at various stages of production.

Answer 46

Export and import of physically intangible items such as services (financial services, customer service outsourcing, ect)

Answer 47

As income rises, average Rate of Tax rises (E.g Canada’s income tax)

Answer 48

As income rises, average Rate of Tax stays the same. Everyone is required to pay an equal proportion of their income in tax. (e.g 10% tax for everyone, heavier burden for low compared to high-income households).

Answer 49

As income rises, average Rate of Tax falls . For instance, someone making $10,000/year gets charged a $1000 fuel duty, meaning the Average Rate of Tax is 10%. . In contrast, someone making $50,000/year gets charged the same $1000 fuel duty, meaning the Average Rate of Tax is only 2%.

Answer 50

Deficit: When government spending exceeds tax revenues Debt:The accumulated effects of deficits over time

Answer 51

China has: 1. Low Labor Costs: (Often lower minimum wages, also supply of workers exceeding demand leads to lower wages) 2. Good Business Ecosystem: (Supply chain efficiency, government agencies, ect) 3.Lower Regulatory Requirements: (China does not have strict regulations on consumer protection, workplace safety, and labor laws) 4.Lower Taxes/Duties: (Exports are easier because they are not taxed as much) 5. Depressed Chinese Currency (Encouraged foreign manufacturers to buy goods, meaning more exports)

Answer 52

-They hade: Trade and Specialization, Mediums of Exchange, systems in place for the production of goods and services, had market economies. However, the Indian Act brought these economies down.

Answer 53

It would increase Canada's GDP by an estimated $27.7 billion

Answer 54

Privatization: Occurs when a government-owned business, operation, or property becomes owned by a private, nongovernment party.

Answer 55

Product is bought & sold outside the manufacturers authorized trading chanels (e.g the unlicensed resale of well-known electronics, like mobile phones)

Answer 56

A cooperative business is a group of people who voluntarily come together to meet shared economic, social, or cultural goals. They jointly own and manage the business, share its benefits fairly, and make decisions democratically, with each member having an equal say.

Answer 57

Not for Profit: Companies are organizations that provide products or services without making a profit. They are generally dedicated to activities that improve or benefit a community.

Answer 58

Wholly owned federal or provincial organizations structured like a private or independant company. When the government decides to sell them, it is called privitization

CIA4U Exam Flashcards

-Master Unit 3 and 4