Midterm #2 (Chapter 6-9)
Which of the following is unlikely to cause a fall in household consumption
A fall in income tax
How would you define Public Goods
A good or service which has features of non-rivalry and non-excludability and as a result would not be provided by the free market
Which of the following is not true
A private sector monopoly will operate break-even pricing
The extent of the threat of new entrants will depend upon the following barriers to entry except
Ability to organize an Olympic event
Organizations faced with the threat of substitutes may react in several ways, except - what is the exception
Acquire the substitute firms to form a monopoly
Which of the following is NOT true
Ageing populations are typical in less economicaly developed countries
For Air Canada to successfully practice price discrimination on air ticket sales, all the following conditions except one must exist. What is the exception?
Air Canada should request customers who bought tickets at lower prices not to tell other customers about it
Cross-subsidization occurs where
An organization uses profits from one sector of its business to subsidize prices in another sector
Which of the following is not a feature of perfect competition
Barriers to entry for firms
One of these factors is the reason why Coca-Cola is able to reduce threat of entrants in the industry
Capital and experience barriers to entry
Generally an increase in interest rates will
Decrease consumption
An example of a positive third party effect is
Education
Which of the following is NOT an approach to preventing the abuse of monopoly power
Evaluation of mergers
Which of the following is FALSE
Fiscal policy involves changes to interest rates
A merit good is one that
Has external benefits
Which of the following statements is not true
Horizontal integration can secure distribition channels
Which of the following key macro factors affect demand for recreation, leisure and tourism industries
Household consumption, West jet bonds issue, government expenditure (all of the above)
Unmet public needs are not provided by the free market because
If provided for one person, others can benefit from them as well
Which of the following is unlikely during an economic boom or upswing
Imports are falling
Which of the following is true of real households disposable income
It equals real households income - direct taxes + benefits
Which of the following refers to the perfectly competitive firm
It is a price-taker
The following is a good example of natural monopoly
Local telephone service
A major criticism of free market is that
Markets do not always consider the full rage of costs and benefits associated with production, or consumption of certain goods and services
Which of the following is not a factor in determining the level of household spending
Number of visiting tourists
The kinked demand curve is a typical feature of the following
Oligopolgy
What is a merit good
One which the government feels that people will under-consume and ought to be provided free or subsidised. Ex: National parks and public parks
Consumer sovereignty means that in a free market system,
Only firms that are sensitive to consumer demand will survive, grow, and make profits
Which of the following does not represent a barrier to entry for new firms in an industry
Perfect competition
Which is a typical firms demand curve in perfect competition market
Perfect elastic: if the firm increases its price, customers will buy from competitors
The demand curve for a firm under perfect competition is as follows
Perfect elasticity
An example of negative third part effect is
Pollution
Important determinants of tourism demand to various countries include the following with the exception of
Practice of democratic system of government
Which of the following statements is true regarding the price in a perfectly competitive market
Price is equal to both the average and marginal revenue
Which of the following is found under monopolistic competition but not under perfect competition
Product differentiation
How would you explain allocative efficiency?
Results from economic efficiency that maximizes output from given inputs and maximum consumer satisfaction from that output
Which of the following is one of Porters five competitive forces
The power of buyers
Which of the following is not one of Porters five competitive forces
The power of negotiators
Price discrimination refers to
The practice of selling the same goods and services at different prices to different groups of customers
Consumption is defined as
The total expenditure on goods and services for immediate consumption by households
The level of government expenditure on tourism and recreation industry tend to reflect the following 3 factors with the exception of
The weather condition
All of the following except ONE are characteristics of perfect competition. Which is the exception
There is extensive advertising
Which of the following is not generally true of left-wing governments
They favor minimal state interference
Which of the following is NOT true of public goods
They tend not the be produced in a free market
Which of the following is NOT true of demerit goods
They tend to be overproduced by the free market
One reason for introducing the minimum wage rate into the labor market is
To help reduce the level of poverty amongst the poor
The free market tends to
Under-produce merit goods
The following are key macro factors that are affecting demand for recreation, leisure and tourism industries with the except ? Which is the exception
West Jet bonds issue
A demerit good is one
Which the government feels that people will over consume and which therefore ought to be banned or taxed. Ex: Cigarettes or alcohol