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.
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
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.
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
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, […]
Date: September 3rd, 2020
QUESTION According to the noted economist Jeffrey Sachs, the International Monetary Fund should: A. not be accountable to anyone as it is a powerful institution. B. bail out banks that have rash lending policies. C. have a “one-size-fits-all” approach to macroeconomic policy. D. keep its operations open to greater outside scrutiny. E. lend only to […]
Date: September 3rd, 2020
QUESTION The various value creation activities that a firm undertakes are referred to as operations. Indicate whether the statement is true or false. ANSWER TRUE Operations are the different value creation activities a firm undertakes.
Date: September 3rd, 2020
QUESTION In response to the global financial crisis of 2008-2009, the International Monetary Fund began to: A. exercise tight controls on fiscal policy of the borrowing countries. B. encourage activities that prevent high inflation rates. C. display inflexibility in policy responses. D. urge countries to adopt policies that included fiscal stimulus and monetary easing. E. […]
Date: September 3rd, 2020
QUESTION According to Michael Porter, all positions on the efficiency frontier are viable. Indicate whether the statement is true or false. ANSWER FALSE Porter emphasizes that it is very important for management to decide where the company wants to be positioned with regard to value (V) and cost (C), to configure operations accordingly, and […]
Date: September 3rd, 2020
