Archives: Quiz

Product team structure and matrix structure are especially suitable for managing innovation in high-tech organizations. Flattening the hierarchy, so that authority relationships are clearly defined, and decentralizing authority can remove a major source of organizational conflict. Answer: TRUE The incrementalist […]

As compared to a large company, the degree of specialization in a small company is higher. An instrumental value is a desired end state or outcome that people seek to achieve. Answer: FALSE During the growth stage of the product […]

Advances in technology are one of the major reasons for changes in jobs. Outsourcing is when an organization sets up its own operations in another country. Answer: FALSE Markov Analysis is used to assess a previous period’s workforce supply on […]

In the strategy phase, the company develops a mix of individual, social, and organizational recruiting techniques for receiving applications. Interest inventories play a key role in organizational selection decisions. Answer: FALSE HR representatives report that one of the key advantages […]

Biographical information tends to have low reliability. An “in-basket” exercise involves a timed exercise that requires a job candidate to respond to simulated memoranda, reports, and other items requiring responses. Answer: TRUE Enforcement mechanisms used by the OFCCP closely mirror […]

Seniority is a highly valid method for internal selection. A targeted message for internal recruits points out how the job matches the needs of the applicant. Answer: TRUE In order for “promissory estoppel” claim to apply when a job offer […]

Although culture is intangible, it can have very significant effects on staffing planning activities. Task statements are written to emphasize the outcomes of a work process, as well as describing how the task is expected to be performed. Answer: FALSE […]

Research shows that when an attribute is measured by both objective and subjective means, there is often relatively low agreement between scores from the two types of measures. Turnover cost estimates are very precise and accurate in most cases. Answer: […]

It is usually wise to just focus on task and KSAO requirements when staffing, because job requirements almost never extend beyond task and KSAO requirements. The logic of prediction indicates that a point-to-point comparison needs to be made between requirements […]

When deciding whether or not to use a new predictor, the validity coefficient, the base rate, and the selection ratio should be considered in combination, not independently. A significance level of p < 0.05 means that there are fewer than […]

Sensory/perceptual abilities tests assess the ability to detect and recognize environmental stimuli. A flexible workforce can be obtained by using staffing firms or independent contractors. Answer: TRUE The gap between current workforce size and available workforce size is a critical […]

Although organizations are strongly encouraged to check the authorization to work of all employees, they cannot discriminate against applicants on the basis of country of origin. Skills are underlying, enduring traits of a person that are useful for performing a […]

Carefully explain how short-run equilibrium and long-run equilibrium in monopolistic competition differ. Use graphs to illustrate your answer. Industry demand is given by P = 200 ‘“ .4Q. The long-run industry costs are such that: LAC = LMC = $80. […]

A convenient way to represent decisions, chance events, and possible outcomes in choices under risk and uncertainty is known as a: a) probability distribution. b) decision table. c) decision tree. d) expected outcome tree. e) risk table. Moral hazard occurs […]

The following figure shows the domestic demand and supply curves for a good. With free trade, the price of the good in the domestic market is P3. The government introduces a 5% tariff in the market which raises the domestic […]

What does the law of diminishing marginal returns state? a) When all inputs to production are increased in equal proportions, output will eventually decrease. b) When one input is increased, with all other inputs unchanged, the marginal product of the […]

Firm X is currently selling a consumer good at a standard price, but is also considering cutting its price. The main risk facing the firm concerns the course of the economy in the near-term: whether the economy will grow at […]

The production of a good with positive externalities will increase when: a) the government provides a subsidy for the good. b) the marginal internal cost of the good is higher than the marginal total cost. c) there is a price […]

A firm will maximize profits and revenues at the same price when: a) the marginal cost is negligible or zero. b) the fixed costs are zero. c) the marginal revenue is zero. d) the demand for the good is unit […]

(a) You are offered a choice between two lotteries, K and L: Lottery K: You win $1,000 with complete certainty. Lottery L: You win: $5,000 with probability .10 $1,000 with probability .75 $0 with probability .15 Compute the expected value […]

Which of the following statements is true regarding the efficiency of using pollution fees versus quantity standards to regulate pollution? a) Quantity standards are more efficient fees because they can be used even in the presence of incomplete information. b) […]

A monopolist maximizes profit by producing: a) on the inelastic portion of the demand curve b) at the level where average cost is minimized c) at the point where the cost of producing the last unit of output equals price. […]

When the marginal product of a variable input is zero, it implies that the firm is at the point where the total product is: a) increasing at an increasing rate. b) also equal to zero. c) at its maximum. d) […]

Most people believe that monopolies always have excessive profits, yet some unregulated monopolies might have very low earnings. (a) Why might a monopoly have little or no economic value? Explain. (b) If you were given a chance to enter a […]

Predatory pricing: a) occurs when a large company sets price below cost to drive smaller firms out of business. b) is the practice of selling the same good at different prices to different consumers. c) means setting a very high […]

The use of intuitive prediction in forecasting: a) puts the wrong weights on different kinds of information. b) provides approximately correct decisions most of the time. c) is objective and reliable. d) likely to produce inaccurate and biased results. e) […]

Suppose that demand for and supply of a commodity in a market are shown on a graph with price on the vertical axis and quantity on the horizontal axis. The y-intercept of the demand curve is equal to $30. The […]

Amanda invests $500,000 in a new business venture. Which of the following correctly identifies the relevant opportunity cost that she faces? a) The potential profits from the business b) The discounted present value of future profits from the business c) […]

In evaluating public programs, benefit-cost analysis: a) takes into account only the benefits that society gains from public programs. b) states that a program should be undertaken only if it generates revenue. c) states that a program should be undertaken […]

Demand in a market dominated by two firms (a Cournot duopoly) is determined according to: P = 300 ‘“ 4(Q1 + Q2), where P is the market price, Q1 is the quantity demanded by Firm 1, and Q2 is the […]

Which of the following auctions are strategically equivalent for bidders holding private values? a) The English and Dutch auctions. b) The sealed-bid and second-price auctions. c) The English and Vickrey auctions. d) The Vickrey and Dutch auctions. e) The Vickrey […]

An individual is uncertain whether to bet on a football game. He believes that the probability of his team winning is 40%. If his team wins, he will receive $180. If his team loses, he’ll pay $120. If the decision […]

The following payoff table depicts a zero-sum game: Table 10-4 Refer to Table 10-4. The equilibrium of the zero-sum game is: a) R1 versus C1. b) R1 versus C2. c) R2 versus C2. d) R3 versus C3. e) R2 versus […]

Refer to Figure 11-1. The external cost associated with producing the good is: a) $5. b) $7. c) $8. d) $12. e) $2. In each case below, find the profit-maximizing level of output. Verify that each output level is a […]

What are the assumptions of the kinked demand curve model? What is its main conclusion about oligopoly behavior? How realistic is the model? Explain with an example the potential benefit of competitive bidding versus bargaining to secure a better price […]

Provide an example of a competitive situation where there is a second-mover advantage. A perfectly competitive market is described by the demand curve QD= 60 ‘“ 2P, and the supply curve QS = 5P ‘“ 10. A typical firm has […]

Carefully explain why adjusted R2is always less than R2. Specialty Steel has carefully measured production in its new plant to determine whether it is technically efficient in production. It has found that, for its two inputs K and L, it […]

Use economic reasoning to comment on the following statement: ‘In a market where products appear to be similar but significant quality and performance differences exist, lack of information about product quality by some proportion of customers justifies government intervention.’ Carefully […]

Consumer surveys indicate that 40% of newspaper readers read automobile ads and 5% of those who read the ads actually purchase automobiles. On the other hand, 50% of magazine readers read automobile ads but only 3% of those who read […]

A faulty gasket on a piece of machinery supplied by Firm Z caused a fluid leak that damaged equipment in Factory X. Determine the range of out-of-court settlements when the expected value of litigation for the two firms is $65,000 […]

George Stigler, a Nobel laureate in economics, suggested that one reason why oligopolies have prices higher than competitive industries is that tacit coordination concerning output and price is much easier when there are only a few competing firms. In addition, […]

A manufacturer of nutritional products is formulating a new liquid vitamin supplement. A bottle of the new product must contain at least 30 units of vitamin B and 50 units of vitamin C. A unit of vegetable extract (V) contains […]

How can the quality of a product serve as an entry barrier in a market? Explain how each of the following events will affect the average and marginal cost curves of a firm: i) An increase in labor costs ii) […]

One of the major steps in decision-making is to explore the alternatives. Do most managerial decisions have a few, limited number of options? Explain. Illustrate your answer with an appropriate example. Why are computer solutions necessary to solve most linear […]

Liza is a manager of a leading soft drink manufacturing firm. Liza uses 10 months data and estimates the following demand equation: Q = 10 ‘“ .5P + 1.5Y + .25PR (2) (.17) (.75) (.50) where P is the price […]

Given that digital music players are used to play music downloaded from the Internet, a fall in the price of digital music players will lead to: a) an increase in the price of a song download. b) an increase in […]

The following figure shows the demand curve ES, the average cost curve AC, the marginal cost curve MC, and the marginal revenue curve MR for a firm. Figure 8-1 Refer to Figure 8-1. If the firm operates as a monopoly […]

A price cut would increase the firm’s profits by $2 million if demand is weak but would decrease profit by $3 million if demand proves to be strong. The firm’s best assessment is a .3 probability that demand will be […]

The minimum price that a seller is willing to accept for his product and the maximum price a buyer is willing to pay for the product are referred to as their: a) bid prices. b) reservation prices. c) offer prices. […]

In a perfectly competitive market, industry demand is: P = 850 ‘“ 2Q, and industry supply is: P = 250 + 4Q (Supply is the sum of the marginal cost curves of the firms in the industry). (a) Determine price […]