QUESTION Which of the following statements is true about the current monetary system? A. Use of instruments such as the forward market and swaps has decreased since the breakdown of the Bretton Woods system. B. The present monetary system lacks the volatile movements in exchange rates that existed in a fixed exchange rate system. C. […]
QUESTION The actions that managers take to attain the goals of the firm are referred to as a firm’s strategy. Indicate whether the statement is true or false. ANSWER TRUE A firm’s strategy can be defined as the actions that managers take to attain the goals of the firm.
QUESTION The amount of value a firm creates is measured by the difference between its costs of production and the value that consumers perceive in its products. Indicate whether the statement is true or false. ANSWER TRUE The way to increase the profitability of a firm is to create more value. The amount of […]
QUESTION Profit growth is measured by the percentage increase in net profits over time. Indicate whether the statement is true or false. ANSWER TRUE Profit growth is measured by the percentage increase in net profits over time.
QUESTION The higher the firm’s profit per unit sold is, the greater its profitability will be, all else being equal. Indicate whether the statement is true or false. ANSWER TRUE The higher the firm’s profit per unit sold is, the greater its profitability will be, all else being equal.
QUESTION Consumer surplus captures some of the value of a product thereby reducing the price a firm can charge for it. Indicate whether the statement is true or false. ANSWER TRUE The price a firm charges for a good or service is typically less than the value placed on that good or service by […]
QUESTION Diminishing returns imply that when a firm already has significant value built into its product offering, increasing value by a relatively small amount requires only minimal additional costs. Indicate whether the statement is true or false. ANSWER FALSE Diminishing returns imply that when a firm already has significant value built into its product […]
QUESTION A strategy that focuses primarily on increasing the attractiveness of a product is referred to as a low-cost strategy. Indicate whether the statement is true or false. ANSWER FALSE A strategy that focuses primarily on increasing the attractiveness of a product is referred to as a differentiation strategy.
QUESTION Jade, a working professional, began driving rashly ever since she got her car insured against damage. She believed that the insurance claim would cover her in case of any accidents. What does Jade’s behavior display? A. Cognitive dissonance B. Conflict of interest C. Systemic risk D. Moral hazard E. Tragedy of the commons […]
QUESTION In terms of attaining a competitive advantage, support activities can be as important as the primary activities of the firm. Indicate whether the statement is true or false. ANSWER TRUE The support activities of the value chain provide inputs that allow the primary activities to occur. In terms of attaining a competitive advantage, […]
