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 assets of Firm 2?
a) Backward Integration
b) Forward integration
c) Nonintegration
d) Contractually unbound
e) Contractually bound
When consumers learn about one seller at a time it is known as a :
a) Simultaneous search
b) Parallel search
c) Serial search
d) Sequential search
e) Divided search
If a firm is producing as efficiently as it knows how, the how will the total cost function
slope?
a) Upward
b) Downward
c) No Slope
d) Downward until an output threshold value, then upward
e) Upward until an output threshold value, then downward
What product characteristic refers to the situation where consumers place higher value
on a product if other consumers also use it?
a) Value creation effect
b) Product linkage
c) Product externality
d) Complementary effect
e) Network effect
Products for which consumers cannot easily compare product characteristics and value
information from others are called:
a) Experience goods
b) Search goods
c) Retail goods
d) Consumer goods
e) Credence Goods
Which of the following is not a benefit that Toys “R” Us gained through its alliance
with McDonald’s Japan?
a) Political know-how
b) Site-selection expertise
c) Changes to Japan’s Large-Scale Retail Store Law requiring MITI approval
d) Business Connections
e) Significant growth on all three major islands
What type of performance measurement based process was used to determine Jack
Welch’s successor, Jeffrey Immelt, as CEO of GE?
a) Ratings compression
b) Merit ratings system
c) 360-degree peer review system
d) Promotion tournament
e) Management-by-objective system
Relaxing of government regulation of economic activities occurred during the second
half of the 20th century for all of the following except:
a) Airline industry
b) Workplace safety
c) Banking industry
d) Trucking
e) Healthcare industry
What type of organizational structure is typically used in planning courses for an MBA
program?
a) Centralized
b) Decentralized
c) Authoritarian
d) Top-down
e) Lottery
What does Chester Barnard mean when he uses the term zone of indifference?
a) The set of issues over which the powerful individual with formal authority usually
prevails
b) The set of issues over which the powerful individual with reputation usually prevails
c) The set of issues over which the powerful individual with knowledge usually prevails
d) The set of issues over which the powerful individual with influence usually prevails
e) The set of issues over which the powerful individual with image usually prevails
What term does Ronald Burt use to describe a valued relationship between two
unconnected parties with a strategy involving spanning a structural hole and bargaining
with parties on either side for the most favorable terms?
a) Mavens
b) Nodes
c) Second who benefits
d) Tertius gaudens
e) Brokers
Which of the following statements is true about a soft commitment?
a) It is bad for competitors
b) It is good for competitors
c) In Cournot competition, capacity expansion is an example of a soft commitment
d) In Betrand competition, a commitment to reduce prices is an example of a soft
commitment
e) Tough commitments are always in the best interest of a firm
Which of the following modes of task interdependence exists between two or more
workers, positions, or groups when one depends on the outcome of others, but not vice
versa?
a) Technology interdependence
b) Environment interdependence
c) Reciprocal interdependence
d) Sequential interdependence
e) Pooled interdependence