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What term best describes a firm informing customers about a product’s benefits? a) Advertising b) Certification c) Disclosure d) Notice e) Broadcasting Why do price-sensitive buyers tend to harm cooperative pricing in a market? a) They cause an increase in […]

Which of the following is a true argument regarding the make-or-buy decision process? a) Firms should make an asset, rather than buy it, if that asset is a source of competitive advantage for the firm b) Firms should buy, rather […]

Which of the following is a characteristic of an implicit contract? a) It is an understanding between parties in a business relationship b) It is generally enforceable in court c) The threat of losing future business makes implicit contracts not […]

What is one way to measure a firm’s willingness-to-pay? a) Marginal profit per unit of production b) Value added analysis c) Cost-benefit analysis d) Input-output analysis e) Sales-per-cost analysis What term does Sutton use to describe the costs of establishing […]

What term best describes the characteristic of a process if past circumstances could exclude certain evolutions in the future? a) Path dependence b) Correlated research strategies c) Evolutionary economics d) Dynamic efficiency e) Dynamic capabilities What term best defines a […]

What was the cause of Walmart’s exit from the German market? a) Loss of a predatory pricing lawsuit b) High tariffs on imported goods c) Total revenue that failed to cover sunk costs d) German regulations against foreign owned firms […]

What group/type of preferences describes when tastes differ markedly from one person to the next and result in horizontal differentiation? a) Search preferences b) Horizontal preferences c) Consumer preferences d) Spatial preferences e) Idiosyncratic preferences What term describes the situation […]

Which of the following serves as a voluntary signal of quality? a) Warrantee b) Independent reviews c) Truth in Advertising d) Free product financing e) Public claims In what special situation might the law of demand not hold? a) In […]

For what critical aspect of drug development has research (Azoulay & Henderson) shown that major drug houses have chosen tapered integration? a) Clinical Research b) Drug Development c) Marketing d) Sales e) Manufacturing Which of the following best describes the […]

Why do consumers tend to gravitate towards non-profit firms when evaluating credence goods? a) Consumers like giving to charities b) Non-profit firms charge lower prices c) Consumers can deduct some or all of the purchase price for tax purposes d) […]

Which of the following is true with regard to the difference in production costs between an item produced in a vertically integrated firm and an item exchanged through an arm’s length market transaction as the level of asset specificity increases? […]

Why are suppliers in a competitive upstream market said to have “indirect power”? a) They can sell their services to the lowest bidder b) They are always concentrated c) Their customers are always locked into relationships with them d) The […]

Which of the following is a source of diseconomies of scale at a large firm? a) Labor costs b) Spreading specialized resources too thin c) Conflicts of interest d) Incentive processes e) All of the above Which of the following […]

Which of the following terms best describes a transfer between two or more parties or resources, or rights to control resources, which occurs outside the terms of a market context? a) Power exchange b) Social exchange c) Authority exchange d) […]

What is a reason that companies might want to ‘buy’ instead of ‘make’ talent from the market when looking to acquire employees with a particular skill set? a) External training methods are better than internal ones b) Companies are always […]

Which of the following cost line items would be a fixed cost? a) Commissions to Salespeople b) Rent c) Raw Materials d) Packaging e) Shipping/Delivery Charges According to the GHM Theory, the choice between an in-house sales force versus independent […]

What term best describes assets that are more valuable when used together than when separated? a) Isolating b) Value-creating c) Imperfectly mobile d) Scarce e) Cospecialized What term describes the situation when a firm earns a higher rate of economic […]

Which of the following is a capability? a) Patents and trademarks b) Brand-name reputation c) Installed base d) Organizational culture e) Sourcing skills Which of the following statements best describes a characteristic of geographic specialization focus strategies? a) Offers a […]

What term best refers to interrelated beliefs, values, material practices, and norms of behavior that exist in an industry at any given time? a) Institutional elements b) Institutional standards c) Institutional influences d) Institutional logics e) Institutional ideas Conflicts of […]

Which of the following is not a result of the holdup problem? a) More difficult contract negotiations and more frequent renegotiations b) Investments to improve ex post bargaining positions c) Reduction in the transaction costs of arm’s length market exchanges […]

Which of the following would not be a characteristic of a good with an elastic demand? a) The product lacks unique features that differentiate it from competing products b) The product is a high percentage of a consumer’s total expenditures […]

Suppose we have two firms (Firm 1 & Firm 2) enter into a transaction where Firm 1 is upstream of firm 2 in a vertical chain. What term best describes the organization of the transaction where Firm 1 owns the […]

Why are the current health care systems on the rise being built around the integration of clinical information technology and disease management systems? a) They both have high costs b) They both are new trends in health care c) They […]

What is a key issue facing managers of the 2000s with respect to production technology? a) Using the technology while maintaining an adequate level of complexity vs. simplicity b) Balancing price of the technology with the benefits of its use […]

Which of the following is not a method to protect intellectual property? a) Patents that are specific and complete b) Complete contracts regarding IP with all suppliers c) Non-disclosure agreements for employees d) Limiting access to IP to a few […]

Which of the following did not contribute to the high transaction related risks for U.S. potato sales in 1840? a) Infrequency of transactions b) Changing transaction partners c) Lack of availability of sales and prices for comparable goods d) Competition […]

Which of the following terms is a concept, developed by Michael Porter, which describes the activities within firms and across firms that add value along the way to the ultimate transacted good or service? a) Five forces b) Value creation […]

Which of the following is a characteristic of economies of scale? a) The average cost declines as output increases b) The average cost increases as output increases c) The average cost remains constant as output increases d) The average costs […]

Which of the following is an example of a market where barometric price leadership occurs? a) Breakfast cereal b) Prime-rate loan c) Tobacco d) Steel until 1960s e) Fast food hamburger Which of the following is least likely a characteristic […]

Which of the following terms describes a nation’s position with regard to the elements (e.g. human resources, infrastructure) of production that are necessary to compete in a particular industry? a) Factor conditions b) Demand conditions c) Supply conditions d) Related […]

How have late 20th and 21st century communications technologies directly created global markets from products and services? a) Created paperless communications b) Created seamless and instantaneous communications c) Decreased coordination for interfirm alliances d) Increased worker productivity e) Unflattened the […]