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
c) Value chain
d) Consumer surplus
e) Producer surplus
Products for which consumers can easily obtain the information required to compare
alternatives are called:
a) Experience goods
b) Search goods
c) Retail goods
d) Consumer goods
e) Credence Goods
What do the vertical boundaries of a firm refer to?
a) The activities the firm itself performs versus purchases from independent firms
b) The level of expertise of the firm’s workforce
c) The breadth of products a firm produces
d) The production output level for a firm
e) The chain of production processes from raw materials to finished good
The process by which governance develops is known as:
a) Vertical decision making (VDM)
b) Path Dependence
c) Internal design
d) Management evolution
e) Institutional learning
Which of the following is not a reason a supplier might seek to sell in bulk?
a) Each sale incurs a fixed cost in writing a contract
b) The purchaser is likely to switch over a small price due to the gains over the large
number of units ordered
c) Each sale involves setting up a different production run
d) The cost of delivery is a fixed on a per unit basis
e) The supplier fears uneven sales
If TC(Q)=1000Q2+100Q+10, what is the formula for AC(Q)?
a) 2000Q+100
b) 2000Q2+100Q
c) 1000Q2+100Q+10
d) 1000Q+100+10/Q
e) 100Q+10+1/Q
Individuals and firms that seek to gain power by reducing dependence on other actors
while increasing the dependence of others on themselves are creating which of the
following?
a) Implicit dependence
b) Explicit dependence
c) Resource dependence
d) Formal Dependence
e) Absolute dependence
Which of the following is not a way teams “collude” within professional sports
markets?
a) Agreeing on ticket prices
b) Agreeing on rules and schedules
c) Employing the same pool of referees
d) Sharing national broadcast revenues
e) Agreeing on rookie drafts
What term best describes how a firm performs based on a comparison to another firm in
its peer set within an industry?
a) Absolute performance
b) Comparative performance
c) Proportional performance
d) Performance measurement
e) Relative performance
Which of the following market structures generally has a Herfindahl index at .6 and
above (usually having light competition, unless threatened by entry)?
a) Perfect competition
b) Monopolistic competition
c) Oligopoly
d) Monopoly
e) N-firm
Why is advertising an effective signal of quality in an experience good?
a) Consumers are uninformed and need advertising to provide information
b) Advertising lists the qualities of a product
c) Consumers believe firms that can afford to heavily advertise sell quality products
d) Sellers can ignore low quality issues in their advertisements
e) Consumers believe advertising more than word of mouth information
Which of the following would make an outcome report card difficult to produce?
a) Large sample of outcome measures
b) Small sample of outcome measures
c) Many outcomes from one product
d) Many sellers produce similar products
e) Consumers purchase high quantities of the product
What kind of economies come from reductions in average costs due to increases in
capacity utilization?
a) Short-run economies of scale
b) Short-run economies of scope
c) Long-run economies of scale
d) Long-run economies of scope
e) Fully automated economies
What is the gaizhi process?
a) Valuing assets according to their earnings
b) A state-owned enterprise and private enterprise entering a joint venture
c) An increase of profitability prior to sale
d) Acquisition of large firms by private organizations
e) Restructuring whereby small firms are leased or sold
Which of the following management actions reflects agency problems due to the fact
that information held by the agent is hard to observe?
a) Enriching managers themselves even if shareholders do not benefit
b) Avoiding risky strategic initiatives even if shareholders view them as ‘reasonable’
c) Paying for services that seem excessive to the shareholders
d) Pumping up the firm’s short-run performance even if shareholders are harmed in the
long-run
e) Giving work a mediocre effort so managers do not have to work excessive hours