How have late 20th and 21st century communications technologies directly created
global markets from products and services?
a) Created paperless communications
b) Created seamless and instantaneous communications
c) Decreased coordination for interfirm alliances
d) Increased worker productivity
e) Unflattened the world
Why does a Nash equilibrium represent a plausible outcome for a game?
a) If Party A chooses first, the outcome is the same as its expectation regardless of B’s
choice
b) If Party B chooses first, the outcome is the same as its expectation regardless of A’s
choice
c) Regardless of which party chooses first, if they both expect the other to choose a its
Nash equilibrium, then both parties expectations will equal the outcome.
d) Neither party needs to make a choice, the market forces an agreeable equilibrium
outcome
e) None of the above are correct
Which of the following is not an impediment to imitation?
a) Legal restrictions
b) Superior access to inputs or customers
c) Scale diseconomies
d) Market size economies
e) Intangible barriers: casual ambiguity, dependence on historical circumstances, and
social complexity
Which of the following statements is true about a tough commitment?
a) It is good for competitors
b) It is bad for competitors
c) In Cournot competition, elimination of production facilities is an example of a tough
commitment
d) In Betrand competition, a commitment to increase prices is an example of a tough
commitment
e) Tough commitments are always in the best interest of a firm
Which of the following is not a benefit of tapered integration?
a) It expands the firm’s input and/or output channels without requiring substantial
capital outlays
b) Allows the firm to use information about the cost and profitability of its internal
channels to help negotiate contracts with independent channels
c) Lets the firm motivate its internal channels by threatening to expand outsourcing and,
at the same time, motivate its external channels by threatening to produce more
in-house.
d) Allows the firm to produce most efficiently in all circumstances
e) Helps the firm protect itself against holdup by independent input suppliers
What term refers to situations in which firms can sustain prices in excess of those that
would arise in a non-cooperative single-shot price or quantity-setting game?
a) Dedicated pricing
b) Strategic pricing
c) Marginal pricing
d) Cost-plus pricing
e) Cooperative pricing
Which of the following terms best describes a phenomenon whereby, despite equal
innovative capabilities, an entrant is willing to spend more to develop an innovation?
a) The replacement effect
b) Strategic intent
c) Strategic stretch
d) Hypercompetition
e) The sunk cost effect
Which of the following practices can help firms facilitate cooperative pricing?
a) Price leadership
b) Advance announcement of price changes
c) Price following
d) Most favored customer clauses
e) Uniform delivered prices
What was a key contribution to the dominance of the family-run small business in
1840?
a) Factories
b) Infrastructure
c) Raw Materials
d) Management
e) Laws
What happens when the process by which governance develops exhibits path
dependence?
a) Governance arrangements split decision rights and controls between two related
firms
b) Governance arrangements are optimal
c) Past circumstances could exclude certain possible governance arrangements in the
future
d) The firm will split into two entities to reduce the governance issues created
e) The governance will form effectively
What economics game theory concept is demonstrated by the Erie Canal public works
project?
a) Nash equilibrium
b) Lock-in
c) Backwards induction
d) Fair division
e) Prisoner’s dilemma
What type of organizational structure is one in which work groups may be organized by
function, geography, or customer base, but where relationships between work groups
are governed more by often-changing implicit and explicit requirements of common
tasks than by the formal lines of authority that characterize other structures?
a) Unitary functional structure
b) Multidivisional structure
c) Matrix structure
d) Network structure
e) Individual structure
Which of the following is not a way in which consumers can benefit from report cards?
a) Easy identification of high quality sellers
b) Increases in demand elasticity incent sellers to improve quality
c) Good report cards lead to more advertising
d) Report cards improve sorting by consumers
e) Consumers can more easily identify quality sellers