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The Coase theorem pertains to market imperfections, including externalities and public
goods.
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China's paramount executive body is the State Planning Commission (SPC).
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Exemptions are also provided under the antitrust laws.
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Depository institutions such as banks are required to maintain a fractional reserve
requirement, which allows the formal banking system to lend a multiple of the deposits
held.
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In the Wilson-Lowi Matrix, interest group politics occurs when costs of nonmarket
action are low and the benefits and harm from enacting a nonmarket alternative are
concentrated.
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Crises are random and thus cannot be analyzed using a conceptual framework.
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The formulation of nonmarket strategies is the responsibility of the society intervening
in such issues.
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One concern with the fair trade concept was whether retailers would charge such a large
price premium that demand would be suppressed.
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The reputation of a firm and its top management is an important nonmarket asset.
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Nonmarket strategies are more important when opportunities are controlled by markets.
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No tax credit was given under the Making Work Pay program.
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Cost-benefit analysis focuses on the costs required to reduce risks and compares the
alternative in question with other alternatives.
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Excessive regulations that hampered the economy are thought to have prevented the
growth of the black economy.
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Demand-side subsidies are provided to power producers.
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To counter large scale acquisitions in the pharmaceutical industry, the government
decided to have all pharmaceutical acquisitions reviewed by the Competition
Commission, the antitrust regulator.
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Cultural imperialism in its strongest form means that in operating internationally a firm
maintains the standards of its home country and judges others by those standards.
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Management involvement in nonmarket strategy formulation and implementation is
required in spite of effective lobbying.
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Defamation is a branch of torts pertaining to false statements made to a third party that
damage a person's reputation.
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Auditing and risk assessment are components of preparedness.
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Nehru and the Congress Party embarked on a socialist path and implemented a socialist
economic policy for several decades, under which the country emphasized the
development of consumer goods at the expense of heavy industry.
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Confucianism views the family as the ideal setting for moral self-cultivation.
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Investors prefer managerial capitalism to market capitalism.
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Granted rights are to be used to screen out alternatives in the analysis stage, whereas
claimed rights are to be evaluated in the screening stage.
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Crisis management can assist during a crisis but is not intended to anticipate the
possibility of a one.
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The Confucian tradition places a strong emphasis on behavioral minutiae because of its
belief that self-cultivation is not a solitary endeavor, but rather occurs in a social
context.
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Supply-side subsidies were less likely to create U.S. jobs, since they were not restricted
to companies producing in the United States.
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The effectiveness of lobbying is independent of government allies.
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Instrumental rights have moral standing independent of the consequences they yield.
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The immediate source of many risks is the weak rule of law in a country.
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Invasion by barbarians resulted in centuries of political fragmentation, during which
much of China's most impressive philosophy was developed.
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In nonmarket competition, society can neither control the nonmarket power exercised
by firms nor require the disclosure of nonmarket actions.
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The Uruguay Round and follow-up agreements were generally unsuccessful, and the
WTO dispute settlement process had been largely ineffective.
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Savings and investments do not involve risks.
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The outcome of structured pluralism is a(n) ________ to address a nonmarket issue.
a) escalation
b) corporate campaign
c) company policy
d) public policy
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To provide a voice to groups that would otherwise be underrepresented, the EU
provides funding for ________ to participate in political and policy-making processes.
a) trade unions
b) work councils
c) lobby committees
d) NGOs
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Which of the following is true with regard to the competitive theory of international
trade?
a) The gains from trade can be demonstrated when two countries either determine the
terms of their trade through bargaining or trade goods in a competitive market.
b) The competitive theory of international trade is based on the trade deficits
accumulated over a period of time.
c) In the absence of trade, the consumption possibilities of each country are far below
its own production possibilities.
d) Gains from trade do not occur if there are differences in the relative prices of
untraded factor inputs such as labor.
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The Environmental Protection Agency defines ________ as that which creates and
maintains the conditions under which humans and nature can exist in productive
harmony, that permit fulfilling the social, economic and other requirements of present
and future generations.
a) stability
b) sustainability
c) an ecosystem
d) the Superfund
Answer:
According to the intrinsic audience interest theory, which of the following features of an
issue increases audience interest in the issue?
a) that the issue is ongoing and relevant
b) that the issue is proximate to the audience
c) that the issue was reported unbiased
d) that the issue does not directly affect the audience
Answer:
Which of the following allows the accumulation of resources through retained earnings
and their allocation within the firm without having to incur the transactions costs of
raising funds in the capital markets?
a) market capitalism
b) a welfare economy
c) managerial capitalism
d) cooperative socialism
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Opportunities can be controlled by ________ at one extreme and ________ at the other
extreme.
a) competitors; customers
b) customers; suppliers
c) government; markets
d) markets; buyers
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Which of the following statements is true of the distributive politics spreadsheet?
a) The supply side information includes available substitutes, the aggregate benefits,
and the per capita benefits for individual members of an interest group.
b) Institutions are included in the spreadsheet because they are viewed as arenas in
which nonmarket action is likely to be generated.
c) The spreadsheet is intended to summarize rather than substitute for the analysis of the
benefits and costs of nonmarket action.
d) It pertains to all the alternatives available to a nonmarket issue.
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Which of the following statements is true of the nonmarket environment of regulatory
agencies?
a) Commissioners and administrators of regulatory agencies do not require Senate
confirmation.
b) Private interests affect regulatory agencies indirectly through pressure on Congress
and the executive branch.
c) Congress can indirectly revise and block changes in statues.
d) The president cannot review regulations to influence regulatory agencies.
Answer:
Effective ethics policies and codes of conduct require ________.
a) employees to reveal internal information about the firm's operations to the
shareholders
b) employees to report any violations
c) employees to indulge in morally motivated nonmarket actions
d) employees to trust firms unconditionally
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Libel is similar to slander in that they both ________.
a) don't pertain to statements that are published or broadcast
b) only apply to statements made in public
c) require actual damages to be shown to be considered as violation
d) are governed by state law and common law
Answer:
Which of the following is the first step of the three-component approach to managing
policy risk?
a) have a structure analogous to that of the intelligence community that can provide
information and assessments.
b) understand the preferences of the actors in the market and nonmarket environments
c) provide a framework for identifying preferences and collecting information
d) influence the risk through collective action and coalitions
Answer:
Which of the following is true with regard to the Environmental Protection Agency
(EPA)?
a) The EPA typically seeks involuntary compliance.
b) The EPA enforcement process does not require the filing of a notice of a complaint
and a hearing before an administrative law judge.
c) The EPA is responsible for administering the Food Quality Protection Act of 1996.
d) The EPA was created by an executive order of President Clinton to control
greenhouse gases emissions by the developing countries
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Firms need to develop contingent strategies as nonmarket competition on an issue is
limited to a single institutional arena.
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Which of the following spurred the development of a vigorous pharmaceutical industry
in India?
a) the adoption of the TRIPS agreement
b) Indian patent law which did not comply with Western specifications
c) the large-scale acquisition of Indian firms by foreign companies
d) the ban on pharmaceutical advertising
Answer:
Rule utilitarianism encourages ________.
a) universalism
b) unilateralism
c) fundamentalism
d) ethical violation
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________ include the individuals and groups with preferences about, or a stake in, the
issue.
a) Institutions
b) Interests
c) Innovation
d) Information
Answer:
26) Ethnic Chinese are also known as the ________ people.
a) Xia
b) Han
c) Sui
d) Qing
Answer:
Which of the following characterizes the nonmarket component of business
environment?
a) It includes those interactions between firms, suppliers, and customers that are
governed by markets and contracts.
b) The interactions of firms typically involve voluntary economic transactions and the
exchange of property.
c) Activities in the nonmarket environment may be voluntary or involuntary.
d) Effective management in the nonmarket environment is not a necessary condition for
superior performance.
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Which of the following portrays the new Industrial Organization view of markets?
a) markets are fragile and prone to failure
b) market power can only arise from horizontal power
c) markets are resilient and imperfections can be addressed through incentives
d) most markets are resilient and strategic behavior can limit efficiency
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Explain the problem of "Missing Girls" in India.
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________ is one of the components of the cost of nonmarket action.
a) Per capita benefits for an individual interest
b) Aggregate benefits to the interests
c) Effectiveness of nonmarket action
d) Substitutes
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Utilitarianism ________ only when societal consequences are aligned with private
consequences.
a) enters into conflict with self-interest
b) coincides with altruism
c) coincides with self-interest
d) coincides with fundamentalism
Answer:
The International Trade Organization (ITO) was established by a group of nations,
under the leadership of ________.
a) Japan
b) the USSR.
c) the United States
d) China
Answer:
To the extent that their interests on an issue are aligned with those of the firm,
________ may be relatively easy to include in a grassroots program.
a) shareholders
b) employees
c) suppliers
d) franchisees
Answer:
An approach taken to counter corruption in India was to turn over the administration of
the power system to ________.
a) the government
b) the municipalities
c) NGOs
d) private companies
Answer:
One of the most striking differences between Confucian and Western political thought is
that the former does not conceive of a role for _______.
a) the head of state
b) family heads
c) the family
d) civil society
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A(n) ________ results when costs are decreasing in the scale of output or in the scope
of the set of goods a firm produces.
a) moral hazard
b) asymmetric information
c) pecuniary externality
d) natural monopoly
Answer:
The International Trade Organization (ITO) was formed at the conclusion of ________.
a) World War I
b) the Vietnam war
c) the Gulf war
d) World War II
Answer:
A social networking site generates support to pass legislation on carbon taxes by
emailing members of Congress. Which of the following is applicable here?
a) peak association
b) ad hoc coalitions
c) grassroots actions directed at government officeholders
d) grassroots actions directed at constituents
Answer:
The framework for corporate social performance (CSP) begins with ________.
a) managers who can strategically manipulate market forces to maximize shareholder
value
b) firms which have demonstrated consistent growth over a period of time
c) individuals who can allocate their resources among consumption goods, investments
in the shares of firms, and direct contributions to social causes
d) firms which have a high rate of attrition
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Once a crisis has been resolved, a firm must reassess its ________ and its preparedness.
a) organizational policies
b) communication methods
c) crisis avoidance measures
d) root cause analyses
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Which of the following is the goal of compensatory justice?
a) distribution of rewards
b) restitution
c) retribution
d) elimination of economic inequities
Answer:
The theory of comparative advantage is based on the assumption of________.
a) perfectly regulated markets
b) perfectly monopolistic markets
c) perfectly competitive markets
d) perfectly competitive innovation
Answer:
A gaming company files a copyright infringement lawsuit against mobile application
development company for using a similar application to register users. Which of the
following is applicable here?
a) testimony
b) judicial action
c) grassroots campaign
d) public advocacy
Answer:
What were the factors responsible for the formation of the General Agreement on Trade
in Services (GATS)?
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Write a short note on the relationship between maxims and rights. Use examples to
support your answer.
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What is interest group politics?
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Explain, with examples, how nonmarket issues originate.
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Analyze the economic and political rationales behind subsidization.
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Nonmarket activities of business support political alternatives that may be contrary to
public interest. Discuss.
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Can corporate social performance (CSP) be rewarded? If yes, how? If no, why?
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Illustrate, with examples, the framework for the analysis of nonmarket issues.
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Firms need to develop approaches to address social pressure from activist groups.
Discuss.
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What are the principal categories of justice theories? Discuss each briefly.
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What are the components of nonmarket analysis?
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Discuss the development of India's pharmaceutical industry.
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Discuss lobbying as a nonmarket strategy in the European Union.
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Describe market and nonmarket strategies. Explain the significance of a nonmarket
strategy.
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What economic restrictions does India have in place?
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Discuss compliance with antitrust laws from the perspective of firms.
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Corporate social responsibility focuses on the responsibility of a firm for social
performance. Where does that responsibility and duty originate?
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Write a short note on the different means to deal with market imperfections in the case
of moral hazards.
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What is coverage? How does it affect the cost and effectiveness of nonmarket action?
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Courts could review regulatory actions for whether they are arbitrary or capricious.
Explain briefly.
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