c2

c2

Student: ___________________________________________________________________________

1. Canada primarily operates in a private market system. True False

2. Much of the theory of the classical capitalist system is based on the philosophical underpinnings of the American system but is equally applicable to the Canadian economy. True False

3. Capitalism requires a strong ethical system. True False

4. A land developer has been receiving considerable negative publicity. He purchased the majority of residential properties in a district of the city and raised the rents. The lower income renters were unable to pay the demanded rent and had to relocate. The developer's right to private property does not allow him to essentially evict lower income renters as this may infringe upon their rights. True False

5. "It's my land!" exclaimed the farmer, responding to the environmentalists. "If I want to cut down every single tree on it, this is my right." The farmer is claiming the fundamental right of capitalismthe right of private property. True False

6. Intellectual property, such as an artist's ownership of music, is becoming increasingly important in Canada. True False

7. The individualism view of capitalism assumes that individuals are inherently self-serving, but neither decent nor rational. True False

8. Economic freedom does not address the rights of individuals, only of business enterprises. True False

9. The gap between executive compensation and worker compensation has decline. True False

10. It is easier to achieve equity than equality. True False

11. Capitalism assumes that competition is both natural and desirable. True False

12. A monopoly occurs when there are few sellers in an industry and these sellers behave similarly. True False

13. The barriers to entry existing in many industries and the need for increasing size to achieve efficiency may have led to profits lower than normal under perfect competition. True False

14. Competition ensures that if excessive profits are made, others will be attracted to the industry. True False

15. According to the work ethic, unemployment is a temporary, misfortunate event. True False

16. The Protestant ethic claims, in part, that being thrift through saving is an element of God's will. True False

17. It is consumers' evaluation of a business that determines whether or not it will survive. True False

18. The more competitive a market, the lower the power of the consumer. True False

19. Canada's economic system is capable of taking into consideration social and ethical concerns. True False

20. In recent years, there has been less government involvement in the Canadian economy. True False

21. State capitalism involves market manipulation. True False

22. Germany operates under a social market economy. True False

23. Frontier capitalism is practised in the United States. True False

24. The government has a stronger role in consumer capitalist systems than in frontier capitalist systems. True False

25. Co-determination takes place in producer capitalist systems. True False

26. Employees at ABC Corporation own shares in the company. This is referred to as "employee capitalism." True False

27. Canada practises consumer capitalism. True False

28. Innovation is accelerated within a producer capitalism system. True False

29. Self-interest can be a benefit of capitalism. True False

30. As of 2009, a majority of Canadians trusted business less than the year before. True False

31. Marco is delighted to finally have purchased his own car. He washes it weekly and always ensures that it is well maintained. His father is shocked at how well Marco is looking after the car; whenever he used to borrow his father's car, Marco would neglect its care. Marco's care for his own car exemplifies that the right to private property, within a capitalist system, results in __________. A. Greater control over one's own destiny B. Pride taken in ownership results in better care being taken of one's own property C. A sense of security D. Respect for the property of others E. Right to private property refers to ownership of land and other real property, not cars.

32. Luis has worked very hard to make his company run as efficiently as possible. Kate, his employee, has noticed that Luis has become increasingly careful about littering and will often pick up waste, not just around his business property, but also throughout the neighbourhood. Luis's behaviour illustrates that the right to private property, within a capitalist system, results in ______________. A. Greater control over one's own destiny B. Pride taken in ownership results in better care being taken of one's own property C. A sense of security D. Respect for the property of others E. fundamental right to ownership of private property.

33. The municipal government has determined that it wants to expand a popular walking trail system that runs through the city. This city issues a notice to the effected landowners stating that it is claiming this land and that the landowners will receive an assessment of the value of their land and payment. Can the government do this? A. Yes, the government has eminent domain over the property and fair price is offered. B. Yes, the government ultimately owns all property in Canada. C. No, the government cannot do this as it violates the fundamental right to ownership of private property. D. No, the government cannot do this, unless the owner voluntarily relinquishes the land. E. It depends on the municipality.

34. The government of Canada A. Owns most natural resources, even if they are on private property. B. Controls property through regulations and restrictions. C. Redistributes wealth through taxation. D. Can expropriate private property. E. Cannot expropriate any property

35. JKM Corporation has decided to relocate its factory to a remote, rural location. The current employees are dismayed and are asking their employee to reconsider. JKM states that they can and will relocate their business wherever they choose. JKM Corporation is asserting which fundamental element of capitalism. A. Right to personal property B. Competition C. Individualism and Economic freedom D. Equality of opportunity E. Profit maximization

36. Frank, the owner of a manufacturing company, is explaining to the employees that the relocation of the factory to a small, rural community will be beneficial to the company. He believes that each employee can decide for him or herself whether to relocate, as it was his own right to choose to relocate his business. Frank is asserting the principle of ____________. A. Individualism B. Equality of opportunity C. Intellectual property D. Right to personal property E. Profit maximization

37. Denise, the owner of an Internet company, is relocating the business to Toronto. Her employees all believe that she should have considered their needs in this decision as they are part of the team that has made the business successful and that customers in the community will be hurt by this move. The employees are applying the principle of __________ in asking her to consider their request. A. Individualism B. Communitarianism C. Consumer sovereignty D. Team building E. Collectivism

38. "It's a level playing field," said the executive to the new hires. "No matter where you went to school, you will succeed here based on what you do starting today. It is all up to you." This sentiment expresses the __________ assumption of capitalism. A. Individualism B. Intellectual property C. Equality of opportunity D. Right to personal property E. Profit maximization

39. The taxation system in Canada is considered progression. This means that those who earn higher income are taxed at a higher rate than are those with lower income. This approach reflects a movement towards ______________ as a priority in Canada. A. Equality of opportunity B. Equality of results C. Individualism D. Oligopoly E. Regression

40. Which of the following statements regarding completion, as a fundamental element of capitalism, is not true? A. Competition is responsible for the orderly operation of the market. B. The fittest firms tend to survive. C. Competition ensures that that goods and services are provided at the lowest price. D. Competition holds profits to a minimum E. Capitalism guarantees a profit is made.

41. Driving to university on Monday morning, Mary noticed that all the gasoline retail stations she passed were selling gasoline at exactly the same price, right down to the decimal point. There are very few sellers of gasoline in her city and they set the price at comparable levels. This is an example of _________. A. Competition B. Monopoly C. Oligopoly D. Profit E. Price-fixing

42. Francois is determined to start an Internet development company. A family friend had entered the business many years ago and has become quite wealthy. His income, however, levelled off after the first few years because excessive ___________ attracted others to the industry, increasing ___________. A. Competition, profits B. Profits, competition C. Work ethic, profits D. Profits, work ethic E. Profits, costs

43. Tammy is a very dedicated employee. She is considered to have a strong work ethic. Which of the following statements regarding Tammy would NOT be correct if her behaviour is consistent with a work ethic? A. Tammy sees that work is the purpose of one's life. B. Tammy sees work as socially valuable. C. Unemployment, to Tammy, would be a temporary misfortune. D. Tammy has a consumption ethic, as well. E. All of the statements are consistent with the body of moral principles considered a work ethic.

44. I want to work extra shifts because I have plans to buy a new stereo. This statement is consistent with ________. A. The work ethic B. Consumer sovereignty C. The consumption ethic D. Economic freedom E. Equality of opportunity

45. A recent trip to the grocery store was disappointing for Robert. He discovered that his favourite brand of canned salmon was no longer being carried. When he asked the store manager, he was told that customers were not buying the product in sufficient quantities to allow them to continue to stock it. This is an example of ______________, which is a fundamental part of capitalism. A. Consumer sovereignty B. Competition C. Equality of Opportunity D. Work ethic E. Economic freedom

46. Which of the following statements regarding capitalism is false? A. Capitalism is considered a controversial economic system B. Economic decision-making is in the hands of individuals or enterprises, which make decisions with the goal of maximizing social welfare. C. Private ownership is fundamental to capitalism. D. Profit is a key motivator of corporate behaviour. E. Profit maximization is an important goal.

47. Cost wasn't apparently an issue for game enthusiasts who, in the hopes of purchasing the Sony PlayStation 3, camped outside of stores in the fall of 2006. Other consumers engaged in bidding wars online and were willing to pay higher than retail prices for the highly desired product. Sony is hoping that 2007 sales will be positively impacted by the difficulty Nintendo, a competitor, has been having meeting demand for its product, the Wii. Gaming systems are extremely popular in Canada. This example reflects the ___________ form of capitalism. A. Consumer B. Producer C. Family D. Frontier E. Garrison

48. "It is important to find middle ground between a high rate of economic growth and social welfare. Government intervention in the economy through planning and economic controls, with significant input from labour organizations, will ensure that citizens benefit from this capitalist approach." This position supports the _________ form of capitalism. A. Consumer B. Producer C. Family D. Frontier E. None of the answers.

49. "Wa," or harmony, is an essential element of Japanese culture and is reflected in the importance of relationship and teamwork in business operations. Canadian businesspersons must understand that they are outsiders within this system. The Japanese operate under _________ capitalism. A. Consumer B. Producer C. Family D. Frontier E. None of the answers.

50. The exchange student's presentation to the Canadian university class is certainly increasing the students' knowledge of other capitalist systems. "The government of our country," the student begins, "has been dismantling protectionist policies that created trade barriers with other nations. But we still need them to help limit the criminal activity of crime families that is often confused with the entrepreneurialism spirit, which is becoming increasingly valued in our country." The exchange student is from __________ where the ___________ model of capitalism is currently exercised. A. Taiwan, frontier B. China, family C. Japan, family D. China, frontier E. Taiwan, family

51. Define the "right to private property" and provide four rationales for this right.

52. Government involvement in business, according to the fundamental principles of capitalism, should be minimal. Describe the governments' role as advocated by capitalism, including the exceptions or the types of programs expected by governments even within capitalist systems.

c2 Key

1. Canada primarily operates in a private market system. TRUE

Difficulty: Easy Sexty - Chapter 02 #1 Topic: LO 2.1

2. Much of the theory of the classical capitalist system is based on the philosophical underpinnings of the American system but is equally applicable to the Canadian economy. FALSE

Difficulty: Easy Sexty - Chapter 02 #2 Topic: LO 2.1

3. Capitalism requires a strong ethical system. TRUE

Difficulty: Easy Sexty - Chapter 02 #3 Topic: LO 2.1

4. A land developer has been receiving considerable negative publicity. He purchased the majority of residential properties in a district of the city and raised the rents. The lower income renters were unable to pay the demanded rent and had to relocate. The developer's right to private property does not allow him to essentially evict lower income renters as this may infringe upon their rights. FALSE

Difficulty: Moderate Sexty - Chapter 02 #4 Topic: LO 2.2

5. "It's my land!" exclaimed the farmer, responding to the environmentalists. "If I want to cut down every single tree on it, this is my right." The farmer is claiming the fundamental right of capitalismthe right of private property. TRUE

Difficulty: Moderate Sexty - Chapter 02 #5 Topic: LO 2.2

6. Intellectual property, such as an artist's ownership of music, is becoming increasingly important in Canada. TRUE

Difficulty: Easy Sexty - Chapter 02 #6 Topic: LO 2.2

7. The individualism view of capitalism assumes that individuals are inherently self-serving, but neither decent nor rational. FALSE

Difficulty: Moderate Sexty - Chapter 02 #7 Topic: LO 2.3

8. Economic freedom does not address the rights of individuals, only of business enterprises. FALSE

Difficulty: Easy Sexty - Chapter 02 #8 Topic: LO 2.3

9. The gap between executive compensation and worker compensation has decline. FALSE

Difficulty: Moderate Sexty - Chapter 02 #9 Topic: LO 2.3

10. It is easier to achieve equity than equality. TRUE

Difficulty: Moderate Sexty - Chapter 02 #10 Topic: LO 2.4

11. Capitalism assumes that competition is both natural and desirable. TRUE

Difficulty: Moderate Sexty - Chapter 02 #11 Topic: LO 2.5

12. A monopoly occurs when there are few sellers in an industry and these sellers behave similarly. FALSE

Difficulty: Easy Sexty - Chapter 02 #12 Topic: LO 2.5

13. The barriers to entry existing in many industries and the need for increasing size to achieve efficiency may have led to profits lower than normal under perfect competition. FALSE

Difficulty: Easy Sexty - Chapter 02 #13 Topic: LO 2.6

14. Competition ensures that if excessive profits are made, others will be attracted to the industry. TRUE

Difficulty: Easy Sexty - Chapter 02 #14 Topic: LO 2.6

15. According to the work ethic, unemployment is a temporary, misfortunate event. TRUE

Difficulty: Easy Sexty - Chapter 02 #15 Topic: LO 2.7

16. The Protestant ethic claims, in part, that being thrift through saving is an element of God's will. TRUE

Difficulty: Easy Sexty - Chapter 02 #16 Topic: LO 2.7

17. It is consumers' evaluation of a business that determines whether or not it will survive. TRUE

Difficulty: Easy Sexty - Chapter 02 #17 Topic: LO 2.8

18. The more competitive a market, the lower the power of the consumer. TRUE

Difficulty: Easy Sexty - Chapter 02 #18 Topic: LO 2.8

19. Canada's economic system is capable of taking into consideration social and ethical concerns. TRUE

Difficulty: Easy Sexty - Chapter 02 #19 Topic: LO 2.8

20. In recent years, there has been less government involvement in the Canadian economy. TRUE

Difficulty: Easy Sexty - Chapter 02 #20 Topic: LO 2.10

21. State capitalism involves market manipulation. FALSE

Difficulty: Moderate Sexty - Chapter 02 #21 Topic: LO 2.10

22. Germany operates under a social market economy. TRUE

Difficulty: Moderate Sexty - Chapter 02 #22 Topic: LO 2.10

23. Frontier capitalism is practised in the United States. FALSE

Difficulty: Moderate Sexty - Chapter 02 #23 Topic: LO 2.10

24. The government has a stronger role in consumer capitalist systems than in frontier capitalist systems. FALSE

Difficulty: Difficult Sexty - Chapter 02 #24 Topic: LO 2.10

25. Co-determination takes place in producer capitalist systems. TRUE

Difficulty: Moderate Sexty - Chapter 02 #25 Topic: LO 2.10

26. Employees at ABC Corporation own shares in the company. This is referred to as "employee capitalism." TRUE

Difficulty: Easy Sexty - Chapter 02 #26 Topic: LO 2.10

27. Canada practises consumer capitalism. TRUE

Difficulty: Easy Sexty - Chapter 02 #27 Topic: LO 2.10

28. Innovation is accelerated within a producer capitalism system. FALSE

Difficulty: Difficult Sexty - Chapter 02 #28 Topic: LO 2.10

29. Self-interest can be a benefit of capitalism. FALSE

Difficulty: Moderate Sexty - Chapter 02 #29 Topic: LO 2.11

30. As of 2009, a majority of Canadians trusted business less than the year before. TRUE

Difficulty: Difficult Sexty - Chapter 02 #30 Topic: LO 2.11

31. Marco is delighted to finally have purchased his own car. He washes it weekly and always ensures that it is well maintained. His father is shocked at how well Marco is looking after the car; whenever he used to borrow his father's car, Marco would neglect its care. Marco's care for his own car exemplifies that the right to private property, within a capitalist system, results in __________. A. Greater control over one's own destiny B. Pride taken in ownership results in better care being taken of one's own property C. A sense of security D. Respect for the property of others E. Right to private property refers to ownership of land and other real property, not cars.

Difficulty: Easy Sexty - Chapter 02 #31 Topic: LO 2.2

32. Luis has worked very hard to make his company run as efficiently as possible. Kate, his employee, has noticed that Luis has become increasingly careful about littering and will often pick up waste, not just around his business property, but also throughout the neighbourhood. Luis's behaviour illustrates that the right to private property, within a capitalist system, results in ______________. A. Greater control over one's own destiny B. Pride taken in ownership results in better care being taken of one's own property C. A sense of security D. Respect for the property of others E. fundamental right to ownership of private property.

Difficulty: Moderate Sexty - Chapter 02 #32 Topic: LO 2.2

33. The municipal government has determined that it wants to expand a popular walking trail system that runs through the city. This city issues a notice to the effected landowners stating that it is claiming this land and that the landowners will receive an assessment of the value of their land and payment. Can the government do this? A. Yes, the government has eminent domain over the property and fair price is offered. B. Yes, the government ultimately owns all property in Canada. C. No, the government cannot do this as it violates the fundamental right to ownership of private property. D. No, the government cannot do this, unless the owner voluntarily relinquishes the land. E. It depends on the municipality.

Difficulty: Moderate Sexty - Chapter 02 #33 Topic: LO 2.2

34. The government of Canada A. Owns most natural resources, even if they are on private property. B. Controls property through regulations and restrictions. C. Redistributes wealth through taxation. D. Can expropriate private property. E. Cannot expropriate any property

Difficulty: Easy Sexty - Chapter 02 #34 Topic: LO 2.2

35. JKM Corporation has decided to relocate its factory to a remote, rural location. The current employees are dismayed and are asking their employee to reconsider. JKM states that they can and will relocate their business wherever they choose. JKM Corporation is asserting which fundamental element of capitalism. A. Right to personal property B. Competition C. Individualism and Economic freedom D. Equality of opportunity E. Profit maximization

Difficulty: Moderate Sexty - Chapter 02 #35 Topic: LO 2.3

36. Frank, the owner of a manufacturing company, is explaining to the employees that the relocation of the factory to a small, rural community will be beneficial to the company. He believes that each employee can decide for him or herself whether to relocate, as it was his own right to choose to relocate his business. Frank is asserting the principle of ____________. A. Individualism B. Equality of opportunity C. Intellectual property D. Right to personal property E. Profit maximization

Difficulty: Moderate Sexty - Chapter 02 #36 Topic: LO 2.3

37. Denise, the owner of an Internet company, is relocating the business to Toronto. Her employees all believe that she should have considered their needs in this decision as they are part of the team that has made the business successful and that customers in the community will be hurt by this move. The employees are applying the principle of __________ in asking her to consider their request. A. Individualism B. Communitarianism C. Consumer sovereignty D. Team building E. Collectivism

Difficulty: Moderate Sexty - Chapter 02 #37 Topic: LO 2.3

38. "It's a level playing field," said the executive to the new hires. "No matter where you went to school, you will succeed here based on what you do starting today. It is all up to you." This sentiment expresses the __________ assumption of capitalism. A. Individualism B. Intellectual property C. Equality of opportunity D. Right to personal property E. Profit maximization

Difficulty: Moderate Sexty - Chapter 02 #38 Topic: LO 2.4

39. The taxation system in Canada is considered progression. This means that those who earn higher income are taxed at a higher rate than are those with lower income. This approach reflects a movement towards ______________ as a priority in Canada. A. Equality of opportunity B. Equality of results C. Individualism D. Oligopoly E. Regression

Difficulty: Moderate Sexty - Chapter 02 #39 Topic: LO 2.4

40. Which of the following statements regarding completion, as a fundamental element of capitalism, is not true? A. Competition is responsible for the orderly operation of the market. B. The fittest firms tend to survive. C. Competition ensures that that goods and services are provided at the lowest price. D. Competition holds profits to a minimum E. Capitalism guarantees a profit is made.

Difficulty: Moderate Sexty - Chapter 02 #40 Topic: LO 2.5

41. Driving to university on Monday morning, Mary noticed that all the gasoline retail stations she passed were selling gasoline at exactly the same price, right down to the decimal point. There are very few sellers of gasoline in her city and they set the price at comparable levels. This is an example of _________. A. Competition B. Monopoly C. Oligopoly D. Profit E. Price-fixing

Difficulty: Moderate Sexty - Chapter 02 #41 Topic: LO 2.5

42. Francois is determined to start an Internet development company. A family friend had entered the business many years ago and has become quite wealthy. His income, however, levelled off after the first few years because excessive ___________ attracted others to the industry, increasing ___________. A. Competition, profits B. Profits, competition C. Work ethic, profits D. Profits, work ethic E. Profits, costs

Difficulty: Moderate Sexty - Chapter 02 #42 Topic: LO 2.6

43. Tammy is a very dedicated employee. She is considered to have a strong work ethic. Which of the following statements regarding Tammy would NOT be correct if her behaviour is consistent with a work ethic? A. Tammy sees that work is the purpose of one's life. B. Tammy sees work as socially valuable. C. Unemployment, to Tammy, would be a temporary misfortune. D. Tammy has a consumption ethic, as well. E. All of the statements are consistent with the body of moral principles considered a work ethic.

Difficulty: Difficult Sexty - Chapter 02 #43 Topic: LO 2.7

44. I want to work extra shifts because I have plans to buy a new stereo. This statement is consistent with ________. A. The work ethic B. Consumer sovereignty C. The consumption ethic D. Economic freedom E. Equality of opportunity

Difficulty: Difficult Sexty - Chapter 02 #44 Topic: LO 2.8

45. A recent trip to the grocery store was disappointing for Robert. He discovered that his favourite brand of canned salmon was no longer being carried. When he asked the store manager, he was told that customers were not buying the product in sufficient quantities to allow them to continue to stock it. This is an example of ______________, which is a fundamental part of capitalism. A. Consumer sovereignty B. Competition C. Equality of Opportunity D. Work ethic E. Economic freedom

Difficulty: Moderate Sexty - Chapter 02 #45 Topic: LO 2.8

46. Which of the following statements regarding capitalism is false? A. Capitalism is considered a controversial economic system B. Economic decision-making is in the hands of individuals or enterprises, which make decisions with the goal of maximizing social welfare. C. Private ownership is fundamental to capitalism. D. Profit is a key motivator of corporate behaviour. E. Profit maximization is an important goal.

Difficulty: Easy Sexty - Chapter 02 #46 Topic: LO 2.10

47. Cost wasn't apparently an issue for game enthusiasts who, in the hopes of purchasing the Sony PlayStation 3, camped outside of stores in the fall of 2006. Other consumers engaged in bidding wars online and were willing to pay higher than retail prices for the highly desired product. Sony is hoping that 2007 sales will be positively impacted by the difficulty Nintendo, a competitor, has been having meeting demand for its product, the Wii. Gaming systems are extremely popular in Canada. This example reflects the ___________ form of capitalism. A. Consumer B. Producer C. Family D. Frontier E. Garrison

Difficulty: Difficult Sexty - Chapter 02 #47 Topic: LO 2.10

48. "It is important to find middle ground between a high rate of economic growth and social welfare. Government intervention in the economy through planning and economic controls, with significant input from labour organizations, will ensure that citizens benefit from this capitalist approach." This position supports the _________ form of capitalism. A. Consumer B. Producer C. Family D. Frontier E. None of the answers.

Difficulty: Difficult Sexty - Chapter 02 #48 Topic: LO 2.10

49. "Wa," or harmony, is an essential element of Japanese culture and is reflected in the importance of relationship and teamwork in business operations. Canadian businesspersons must understand that they are outsiders within this system. The Japanese operate under _________ capitalism. A. Consumer B. Producer C. Family D. Frontier E. None of the answers.

Difficulty: Difficult Sexty - Chapter 02 #49 Topic: LO 2.10

50. The exchange student's presentation to the Canadian university class is certainly increasing the students' knowledge of other capitalist systems. "The government of our country," the student begins, "has been dismantling protectionist policies that created trade barriers with other nations. But we still need them to help limit the criminal activity of crime families that is often confused with the entrepreneurialism spirit, which is becoming increasingly valued in our country." The exchange student is from __________ where the ___________ model of capitalism is currently exercised. A. Taiwan, frontier B. China, family C. Japan, family D. China, frontier E. Taiwan, family

Difficulty: Difficult Sexty - Chapter 02 #50 Topic: LO 2.10

51. Define the "right to private property" and provide four rationales for this right.

Answers will vary

Difficulty: Easy Sexty - Chapter 02 #51 Topic: LO 2.3

52. Government involvement in business, according to the fundamental principles of capitalism, should be minimal. Describe the governments' role as advocated by capitalism, including the exceptions or the types of programs expected by governments even within capitalist systems.

Answers will vary

Difficulty: Moderate Sexty - Chapter 02 #52 Topic: LO 2.10

c2 Summary
Category Difficulty: Difficult Difficulty: Easy Difficulty: Moderate Sexty - Chapter 02 Topic: LO 2.1 Topic: LO 2.10 Topic: LO 2.11 Topic: LO 2.2 Topic: LO 2.3 Topic: LO 2.4 Topic: LO 2.5 Topic: LO 2.6 Topic: LO 2.7 Topic: LO 2.8 # of Questions 9 20 23 52 3 15 2 7 7 3 4 3 3 5