Project #20183 - Multiple choice

Multiple Choice Questions. (1 mark each.)

(Select one of the choices by circling it.)

1) Which of the following statements is applicable to regulation?

a) Is not implemented through judicial institutions

b) Is not implemented through independent commissions

c) Cannot be appealed to courts

d) They take place through confidential hearings

2) Regulation is government intervention in economic activity using all but which of the following?

a) Commands

b) Controls

c) Incentives

d) Market manipulation

3) In the case of a natural monopoly, economic theory recommends that government set the price of goods and services to be:

a) Equal to total cost of production

b) Equal to average cost of production

c) Equal to marginal cost of production

d) Equal to the competitors’ price

4) Which of the following is a cause of market imperfection?

a) Pure competition

b) Asymmetric information

c) Government has no intervention in the economy

d) Complete free trade

5) What term below refers to behaviour induced when people do not bear full consequences for their actions?

a) Moral hazard

b) Transaction costs

c) Asymmetric information

d) Free entry and exit into the market

6) Capture theory predicts that regulation will be found where there is/are market ______.

a) Perfection

b) Shifts

c) Imperfections

d) Regularities

7) When is social efficiency attained?

a) Aggregate well-being is minimal

b) Aggregate well-being is total

c) Aggregate well-being is maximal

d) Aggregate economic costs are minimal

8) What are the keys to incentive-based approaches to meeting environmental goals?

a) Imposes a cost and leaves it to individual polluters to decide how best to respond

b) Imposes a fine and leaves it to government to decide the regulations

c) Imposes sanctions of a certain limit and lets the individual polluters decide how to

manage it within government guidelines

d) Imposes a cost and dictates the incentives for managing the situation

9) In the Coase Theorem, social efficiency is a problem because of _________to bargaining, which are referred to as ____________costs.

a) Complexities; inherent

b) Impediments; transactions

c) Impediment; business

d) Complexities; transactions

10) What approach has become an effective means of achieving environmental goals at the least cost to society?

a) Command-and-control

b) Incentives or markets

c) Common goods

d) International agreements

11) Cap-and-trade systems are also called.

a) market systems

b) tradable permit systems

c) incentive systems

d) governmental systems

12) Most of the costs of environmental protection are borne by _______?

a) Private parties

b) Government

c) Business

d) All of the above

13) What is NIMBY?

a) Not In My Best Year

b) Not In My Backyard

c) Not In Money By Years

d) Not Involved More By Yards

14) What is another name for common law?

a) Judge-made

b) Jury-made

c) Public-made

d) Citizen-made

15) In which of the following countries is common law not used?

a) United States

b) France

c) United Kingdom

d) Canada, except Quebec

16) __________ is a set of rights to control a tangible or intangible thing.

a) Property

b) Common law

c) Civil law

d) Contract

17) In the appropriability of rents, if the cost of replication is high, and intellectual property protection is _______, you have strong appropriability.

a) Tight

b) Loose

c) Flexible

d) Redoubled

18) Changing ____________ can dramatically alter the costs of replication of intellectual creations, as in the case of Napster.

a) People

b) Tastes

c) Technology

d) Management

19) A _______ may be granted for an invention of any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.

a) License

b) Patent

c) Contract

d) Copyright

20) What must you do to claim a copyright?

a) File with the government

b) You can claim it even if you do not file with the government

c) File with local government

d) File on your income tax

21) A trademark produces what two values?

a) Economic and political

b) Economic and social

c) Economic and public

d) Social and private

22) Contracts are entered into to induce _________, which refers to a change in behaviour by a party.

a) Assurances

b) Reliance

c) Common law

d) Exchanges

23) According to Adam Smith, when markets are competitive, the pursuit of market value maximization results in which of the following?

a) Economic efficiency

b) No trade deficit

c) A level competitive field

d) High valuation on money

24) According to Milton Friedman, the objective of a corporation is the maximization of its

a) taxes

b) profits

c) trust

d) capital

25) Milton Friedman argues that the responsibility of business is to:

a) Conduct the business in accordance with the owners’ desires.

b) Make as much money as possible.

c) Conform to the basic rules of society both embodied in law and in ethical


d) All the above are considered as business responsibilities according to


26) Which of the following best describes the relationship of market capitalism with managerial capitalism?

a) They coexist

b) They are in constant conflict

c) They are contrary to each other

d) They are the same

27) Managerial capitalism may be more efficient than market capitalism. Why is this?

a) It allows the accumulation of resources by not distributing the earnings to


b) It allows for the allocation of retained earnings without borrowing from the

capital markets

c) Managers may keep information within the company, the divulgence of which

may hurt the corporation

d) Each one of the above arguments favours managerial capitalism as being more


28) What are the periods of rule called in China?

a) Dynasties

b) Periods

c) Segments

d) Realms

29) The leader of China at the beginning of the Communist era, was:

a) Chiang Kai-shek

b) Mao Zedong

c) Sun Yat-sen

d) Deng Xiaoping

30) What is a danwei system?

a) Social unit

b) Economic unit

c) Work unit

d) Labor division

31) Which one of the following is not a Confucian element?

a) Hierarchy

b) Moral Rectitude

c) Deference

d) Pride

32) Informal personal ties in China are referred as what?

a) Li

b) Ren

c) Guanxi

d) Xoani

Page 6 of 11

33) Which of the two pairs of institutions in China are the relatively weaker in comparison?

a) The Bureaucracy and the Judiciary

b) The Bureaucracy and the Legislature

c) The Party and the Bureaucracy

d) The Legislature and the Judiciary

34) An SOE in China is a what?

a) State Ordered Enterprise

b) State Ordained Enterprise

c) State Owned Enterprise

d) State Operated Enterprise

35) After World War II, the reductions in trade barriers were primarily the result of which country’s dominance?

a) Great Britain

b) Canada


d) United States

36) Trade policy consists of what?

a) United Nations charter and regulations

b) International agreements among the countries involved

c) Domestic laws pertaining to international trade

d) Both international agreements among countries and domestic laws pertaining

to international trade

37) Approximately how many countries are members of the WTO?

a) 50

b) 90

c) 100

d) 150

38) The central principle of the WTO agreements is embodied in which requirement?

a) Most Favoured Nation

b) Advanced Nation Status

c) Developed Nation Status

d) Democratic Free Nation Status

39) What are the two kinds of conditions that protection applies to?

a) Predatory trade practices and undue competition

b) Predatory trade practices and countries that have horrible human rights policies

c) Relative efficiency and unfair labor laws

d) Predatory practices and relative efficiency

40) Who bears the cost of protectionism?

a) Businesses

b) Consumers

c) Governments

d) National trade organizations

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