Which of the following terms describes a nation’s position with regard to the elements
(e.g. human resources, infrastructure) of production that are necessary to compete in a
particular industry?
a) Factor conditions
b) Demand conditions
c) Supply conditions
d) Related supplier or support industries
e) Strategy, structure, and rivalry
In which of the following ways can entry erode incumbents’ profits?
a) Entrants divide market demand among fewer sellers
b) Entrants decrease market concentration
c) Entrants usually grow the market for all parties
d) Entrants increase market concentration
e) Entrants reduce internal rivalry
What was the most significant development to the evolution of business circa 1910?
a) Railroad integration
b) Telegraph communication expansion
c) Banking and accounting standard practices
d) Mass-production technology
e) Advent of steam technology in railroads and shipping
Which characteristic does not describe a perfectly competitive market?
a) Firms produce identical or nearly identical products
b) Market price is beyond the control of any individual firm
c) A firm’s demand curve is perfectly horizontal at the market price
d) Industry-level price elasticity is finite
e) Firm-level price elasticity of demand facing another perfect competitor is infinite
Why is firm specific learning better in general for an organization?
a) Encourages individuality among workers within the organization
b) Keeps unionized workers happy
c) Allows workers to acquire skills they can then ‘shop around”
d) Ensures worker knowledge is tied to current employment
e) Increases complexity and creativity in the organization
By simultaneously halting air traffic and financial markets, what recent historical event
highlighted the interdependence company infrastructure?
a) 2000 Presidential Election
b) 2004 Olympics
c) Fall of Enron
d) September 11, 2001
e) Hurricane Katrina
Why do consumers often rely on friend’s advice when shopping for experience goods?
a) They know their friend’s tastes
b) Friends are less likely to be biased reporters
c) There are no search costs in seeking friend’s advice
d) Friends are always more accurate than unknown verifiers
e) All friends share the common goal of highest quality
Which of the following terms describes when firms with high scores tend to have more
than their share of luck in rankings?
a) Measurement bias
b) Process error
c) Mean regression
d) Multitasking
e) Mean reversion
Which of the following terms best describes a piece of information on which an
incentive contract (explicit or implicit) can be based?
a) Absolute Performance
b) Relative Performance
c) Incentive
d) Performance measure
e) Performance standard
Which of the following benefits of diversification explains the idea that combining
unrelated businesses can allow firms to finance projects through cross-subsidization
when they previously were unable to finance the same projects externally?
a) Use of internal capital markets
b) Economies of scale and scope
c) Economizing on transaction costs
d) Diversifying shareholder portfolios
e) Identifying undervalued firms
What is a Nash equilibrium?
a) A state where each player is doing the best it can, given the strategies of all other
players
b) A state where the sum of all payoffs is maximized
c) A state where the players always have achieved their best possible result
d) A state at which the MR=MC for a firm
e) A state where each player always must play a dominant strategy
What term coined by Michael Porter describes a firm that pursues elements of cost
leadership and benefit leadership at the same time and in the process fails to achieve
either a cost advantage or a benefit advantage?
a) Five forces
b) Value creation
c) Value chain
d) Stuck in the middle
e) Generic strategy