TBChap006 - Chapter 06 Multiproduct Strategies Multiple...

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Chapter 06 Multiproduct Strategies Multiple Choice Questions 1. Often owners of firms who hire managers must install incentive or bonus plans to ensure that the: A. company is financially secure. B. manager will work hard. C. manager will maintain employee morale. D. company will have positive economic profits. 2. Which of the following forms of payment is NOT an incentive plan? A. Commission plans for salesmen B. Flat salary for a plant manager C. Bonuses for managers that increase as profits increase D. None of the statements is correct. 3. Which of the following is NOT an incentive scheme to ensure that workers do a good job? 6- 1 X
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4. Which of the following is NOT a means of avoiding opportunism? 5. Long-term contracts become longer: 6. A relationship-specific exchange occurs when: A. a partnership is dissolved. B. specialized investments are important. C. a partnership is initiated. D. shareholders receive dividends. 7. When relationship-specific exchange occurs in complex contractual environments, the best way to purchase inputs is through: 6- 2 X
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8. A firm might choose to produce its own inputs if: 9. An agent hired by the owner of productive resources to control the production process is: 10. Spot exchange can be inefficient in the presence of: A. opportunis m. B. a complex contracting environment. C. spot checks. D. None of the statements is correct. 11. A negative side of long-term contracts is: 6- 3 X
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