If a management innovation is going to be successful, it needs to address:
A. the personal problems of its workers.
B. incentive and reward systems.
C. the concerns of its rivals.
D. the problem of unemployment.
A primary reason for the use of implicit contracts in internal labor markets is to:
A. establish long-term employment relationships.
B. encourage employees to participate in decision making.
C. reduce the costs associated with formalizing contracts.
D. reduce the training and recruitment expenses.
The most famous story about organizing tasks into jobs comes from Adam Smith’s tale
of the pin factory. In that story, he argues that:
A. specialization of jobs into simple tasks increases productivity.
B. cross-training is critical for productivity.
C. coordination is the biggest problem for factory efficiency.
D. one worker should be assigned all the tasks in pin construction.
A firm’s average total cost is minimized at <<AU: Change / to “per”?>>$5/unit when it
produces 10 units. What is the marginal cost when the firm produces 10 units?
A. Less than $5/unit
B. Greater than $5/unit
C. $5/unit
D. $10/unit
Tom and Jerry have been roommates for the past two years. During this period, they
bought 11 CDs together. Now that each is taking his own apartment, they are deciding
how to split their possessions. Tom suggests they take five CDs each and give the extra
one to Arnold, their neighbor. Jerry, on the other hand, suggests they flip a coin to
decide who gets the 11th CD. Assuming they neither like nor dislike being altruistic,
which of the two suggestions is Pareto efficient?
A. Tom’s suggestion is Pareto efficient.
B. Jerry’s suggestion is Pareto efficient.
C. Both suggestions are Pareto efficient.
D. None of the suggestions is Pareto efficient.
If a company division is operated as a revenue center and its demand curve is P = 200 –
2Q, how many units should it produce per day?
A. 0
B. 25
C. 50
D. 100
Which of these is true of political coalitions?
A. Political coalitions are similar to the coalitions formed between oligopolistic firms.
B. Political coalitions are synonymous to political regulations.
C. Members of a political coalition are usually risk lovers.
D. Members of a political coalition are usually risk-averse.
Specialized task assignment’s greatest cost is ignoring the foregone ______ across
tasks.
A. comparative advantage
B. flexibility
C. complementarities
D. lower cross-training costs
Which of the following is an important factor that helps in generating economic profit
in an industry?
A. Degree of rivalry within an industry
B. Threats of complements
C. Type of product manufactured in an industry
D. The means of production
Sometimes an old company in an industry can build a large plant that has lower cost per
unit than a potential entrant (newcomer) can duplicate. This is an example of a market
A. weakness based on cost.
B. power based on scale economies.
C. power based on specific assets.
D. weakness based on reputation deficiency.
Edt = – 5. This means that if
A. Pt increases by 5 percent, then Qdt will decrease by 1 percent.
B. Qdt increases by 5 percent, Pt will decrease by 1 percent.
C. Pt increases by 1 percent, Qdt will decrease by 5 percent.
D. Pt decreases by $1, Qdt will decrease by 5 units.
Though Nash games are noncooperative, a cooperative outcome is more likely if
A. the long-run gains are smaller than the short-run gains.
B. firms can easily monitor the outcomes from a rival’s defection.
C. firms expect the market relationship to last a long time.
D. firms expect the market relationship to last only for a short time.
The higher the price elasticity, the
A. more sensitive price changes are to quantity demanded.
B. less sensitive price changes are to quantity demanded.
C. more sensitive quantity demanded is to price changes.
D. less sensitive quantity demanded is to price changes.
“Laying the groundwork” before introducing a proposal means:
A. being able to market the proposal to those employees who will be affected by it.
B. beginning to build facility before the ratification of the proposal so that the company
cannot back away.
C. looking for alternative proposals that can be implemented.
D. calculating monitoring costs before implementation.
TQM and other management innovations fail because:
A. workers don’t underestimate the costs of change.
B. management estimates the costs of change correctly but workers don’t.
C. management overestimates the costs of change.
D. management underestimates the costs of change.
Which one of the following is a source of conflict between owners and managers?
A. Managers are often reluctant to increase the size of the firm.
B. Owners are reluctant to lay off the manager and want to empire-build.
C. Managers are reluctant to lay off their friends and want to empire-build.
D. Owners are reluctant to lay off their friends and want to empire-build.
A company might charge a customer different prices per unit, depending upon the
number of units purchased. This is called
A. bundling.
B. two-part tariff.
C. price discrimination.
D. block pricing.
In a Nash equilibrium, firms are clearly strategically interdependent, and
A. they cooperate with each other to determine market outcomes.
B. they determine price in a closed auction bid system.
C. they are dependent on differentiated goods.
D. they are noncooperative in determining market outcomes.
Refer to Figure 9.2. What is the Nash equilibrium of this pricing game?
Consumer surplus is
A. the result of a shortage.
B. the result of a surplus.
C. a measure of the quantity traded by consumers.
D. a measure of the gains from trade to consumers.
Under ABC, different categories of ______ are assigned to products based on
underlying cost drivers of that department.
A. overhead costs
B. opportunity costs
C. average costs
D. sunk costs
Joan Petty, a human resource manager, offers Billy Self $2,750 per month as an
inventory manager. She is willing to offer $750 more per month, but Billy does not
have that information and walks away from the job offer. This is an example of a:
A. market at work.
B. bargaining success.
C. bargaining failure.
D. market in transition.
Analyze the demand function for a dinner at FancyFoods, a restaurant, given the four
changes listed below:
(a) The restaurant down the street, Gourmet Meals, features a two-for-one meal special.
(b) The opera provides a coupon offering a 15 percent discount at FancyFoods with
each ticket for the 6:00 p.m. show.
(c) Always Round Tire runs a special on tires; a 30 percent reduction in price if you buy
four tires.
(d) The main employer in town provides a large increase in salaries for white-collar
workers.
Recent research on CEO behavior tells us that CEOs generally
A. increase their firm’s R&D expenditure so as to boost earnings long before they
retire.
B. reduce their firm’s R&D expenditure so as to boost earnings long before they retire.
C. reduce their firm’s R&D expenditure so as to boost earnings just before they retire.
D. increase their firm’s R&D expenditure so as to boost earnings just before they retire.
If an employee makes a point of meeting his manager every morning to detail the
positive outcomes of the work done the previous day, this is an example of:
A. project initiation.
B. influence costs.
C. project monitoring.
D. decentralization of decision making.
Let Edt = -0.5. This implies that the demand for t is
A. elastic, because if Pt increases by 1 percent, Qdt will decrease by 0.5 percent.
B. elastic, because if Pt decreases by 1 percent, Qdt will decrease by 0.5 percent.
C. inelastic, because if Pt decreases by $1, Qdt will increase by 0.5 units.
D. inelastic, because if Pt decreases by 1 percent, Qdt will increase by 0.5 percent.
The demand and supply curves in the market for gasoline are illustrated in the graph
below.
Starting at the equilibrium point, if the government imposes a price ceiling of $10,
consumer surplus will then be given by the area ____ <<PM: Make this type question
“Fill in the blank”?>>
A. A.
B. A + B.
C. A + D.
D. C.
A firm’s market power decreases if the price elasticity of demand for its product
A. stays the same over time.
B. decreases.
C. equals the income elasticity of demand.
D. increases.
Incentives are not likely to pose a problem:
A. as long as employers can exploit the employees.
B. if the interests of the employees and the employers conflict somewhat.
C. if the interests of the employees and the employers conflict.
D. if the interests of the employees and the employers are perfectly aligned.
You purchase both potatoes and gasoline regularly. Your income increases and you
purchase more gasoline and less potatoes. This implies that
A. gasoline has a negative substitution effect.
B. potatoes are normal goods.
C. gasoline is an inferior good.
D. gasoline is a normal good.
Kevin Freeman is the head of a team developing plastic knee replacements. His
research team has discovered an improved materials -handling procedure that reduces
contamination of the product during assembly. The issue for the company after the
discovery is:
A. how this specific knowledge can be transferred to the company’s whole production
process.
B. whether or not this specific knowledge can be implemented in the knee team’s
process.
C. whether to transfer this new knowledge for general corporate use.
D. to figure out how this discovery can be utilized to reduce influence costs.
While firms buy many of their inputs through the open market, there is often a desire to
produce critical inputs. A common concern in producing an input internally is that:
A. the firm will find it too easy to manage quality.
B. the firm will not be able to minimize costs over the long run.
C. outside competitors will learn about the quality of inputs.
D. the firm will get prompt supply of the input.