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