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 than make, to avoid the costs of making the product
c) Firms should make, rather than buy, to avoid paying a profit margin to independent
firms
d) Firms should buy, rather than make, in general, because market firms are subject to
the discipline of the market and must be efficient and innovative to survive
e) Firms should make, rather than buy, because a vertically integrated producer will be
able to avoid paying high market prices for the input during periods of peak demand or
scarce supply
Size, growth, and character of home demand for a firm’s product are examples of what?
a) Factor conditions
b) Demand conditions
c) Supply conditions
d) Related supplier or support industries
e) Strategy, structure, and rivalry
What term best describes exchanges of goods, services, or promises on terms that take
place outside of traditional economic markets and are not enforceable in court?
a) Handshake agreement
b) Noncontractual exchange relationship
c) Internal context
d) External context
e) Exclusive dealing
Which of the following is a complement to professional sports?
a) Merchandise sales
b) Gambling
c) Luxury Boxes at stadiums
d) Food and beverage sales
e) None of the above
Which set of advice below should a manager disregard when seeking pricing stability
that is least likely to suffer from antitrust legislation?
a) All pricing decisions should be made unilaterally. Avoid direct contacts with
competitors about price
b) Carefully handle public pricing communications
c) Always share analyses of probably competitive reactions
d) Monitor the content. Announce price changes; do not lecture competitors about the
need to raise prices or consequences of reducing them
e) Clear your pricing tactics with an attorney well versed in antitrust law
Which of the following is not a characteristic of substitute products X and Y?
a) They have the same or similar product performance characteristics
b) They have the same or similar occasions for use
c) They are sold in the same geographic market
d) Customers are indifferent between X and Y
e) A price increase of X while keeping the Y’s price constant leads to a drop in
purchases of X and an increase in purchases of Y
What are the two types of barriers to entry?
a) Legal and strategic
b) Price and Size
c) Structural and strategic
d) Size and Legal
e) Price and Structure
Which of the following terms describes a contract by which the value of the
compensation depends on the measured performance of the employee?
a) Explicit incentive contract
b) Implicit incentive contract
c) Risk sharing contract
d) Compensation contract
e) Pay-for-performance contract
Which of the following is a concept developed by Michael Porter that describes, in
broad terms, how it positions itself to compete in the market it serves?
a) Value chain
b) Generic strategy
c) Benefit leadership
d) Cost Leadership
e) Focus
Which of the following features of transactions make those transactions excellent
candidates for alliances?
a) The transaction involves impediments to comprehensive contracting
b) The transaction is complex, not routine.
c) The transaction involves the creation of relationship-specific assets by both parties in
the relationship, and each party to the transaction could hold up the other
d) It is excessively costly for one party to develop all the necessary expertise to carry
out all the activities itself
e) All of the above
What type of option exists when a decision maker has the opportunity to tailor a
decision to information that will be received in the future?
a) Real option
b) Commitment option
c) Project option
d) Decision option
e) Future option
What professional sports complement poses the biggest dilemma?
a) Cheerleaders
b) Mascots
c) Gambling
d) Television
e) Radio
Which of the following is measured by a report that assesses how a product is
produced?
a) Process
b) Inputs
c) Warrantees
d) Outcomes
e) Longevity
Which of the following terms describes when efforts to promote improvements on one
dimension of performance are confounded by changes in other dimensions of
performance?
a) Multitasking
b) Co-linearity
c) Test bias
d) Dimension bias
e) Linking
Who are the most powerful suppliers in professional sports?
a) Players unions
b) Referees
c) Owners
d) Politicians
e) Cities
Which of the following terms best describes how a firm uses a division of labor to
organize tasks, specify how its staff performs tasks, and facilitate internal and external
information flows?
a) Organizational structure
b) Formal and informal firm arrangements
c) Firm hierarchy
d) Divisional structure
e) Firm team structure