The long-run price elasticity of demand for a product is generally _ the shortrun elasticity for the same product.
A. lower than
B. equal to
C. higher than
D. not comparable to
Assume the demand function for skin care products is given by Q = 1,
Production and Cost
Assume your company produces good X using only two inputs, capital (K) and labor (L).
Also, assume L is measured on the vertical axis and K on the horizontal one. If the prices of
inputs are PK=$30 and PL=15, and your company
Economist's View of Behavior
Assume that the quantity of CDs is measured on the horizontal axis, while the quantity of
movie tickets is measured on the vertical axis. If available income decreases, then the new
A. will have a smalle
DECISION RIGHTS: THE LEVEL OF EMPOWERMENT
Jobs have at least two important dimensions:
A. tasks and uncertainty.
B. tasks and decision authority.
C. uncertainty and decision control.
D. decision authority and decision control.
A job in sales su
The key to organizational architecture is:
A. assignment of decision rights, reward structure and evaluation systems
B. the methods of rewarding (paying) top management
C. a complicated structure of performance evaluation systems
CHAPTER 13 - DECISION RIGHTS: BUNDLING TASKS INTO JOBS AND
Alfred Chandler, the noted business historian, indicated that "the administrative load of
the senior executives increased to such an extent that they were unable to handle their
CHAPTER 14 - ATTRACTING AND RETAINING QUALIFIED EMPLOYEES
If an prospective employee is not offered her reservation utility or reservation wage,
then she will:
A. tend to look for another job or withdraw from the labor market.
B. seek a larger benefit pac
CHAPTER 18 - CORPORATE GOVERNANCE
"Corporate governance" refers to aspects of the corporation such as:
A. the corporate tax rate.
B. CEO compensation.
C. decentralization of decision rights to union workers.
D. government regulation of corporate health an
CHAPTER 21 - UNDERSTANDING THE BUSINESS ENVIRONMENT: THE
ECONOMICS OF REGULATION
The enforcement of contracts and the adjudication of contract disputes through the
A. is a major source of business inefficiency in the United States.
B. is not
Economics of Strategy: Game Theory
If two firms exist in the market, it is often expected that the Cournot (Nash) equilibrium
will occur. If the firms have significant excess capacity, then it is likely that corporate
strategy will emphasize:
Incentive Conflicts and Contracts
Incentive problems can be overcome, then it is in the interest of all parties to develop efficient
solutions to agency problems. Through _ , there will be more wealth to be shared
among contracting parties.
Economists tend to focus on one structural aspect of market organization that is more
important than the others. It is:
A. the number of buyers and sellers.
B. product homogeneity or differentiation.
C. the quality of market inf
Economics of Strategy: Creating and Capturing Value
Finding a way to create and capture value is part of:
A. business strategy.
B. cost control systems.
C. management control, but not general management.
D. allowing the market to run a company's
INDIVIDUAL PERFORMANCE EVALUATION
If a work performance measure is based on both objective and subjective measures, the
objective measure might be the:
A. number of units produced.
B. dependability of worker.
C. quality of units produced.
Markets, Organizations, and the Role of Knowledge
A competitive equilibrium price guarantees that:
A. consumers who want to buy the product at the market price are satisfied.
B. producers can hoard the quantity they want to at the current market
Pricing with Market Power
A firm with market power in pricing faces a:
A. flat demand curve.
B. vertical demand curve in all cases.
C. price inelastic demand curve.
D. downward sloping demand curve.
If a firm prices its output at marginal cost t
A household products firm was required to examine its organizational architecture in
order to survive. What three aspects of its organization did it look at?
A. Decision rights, rewards, and technology.
The basic incentive problem is that owners and:
A. employees have similar objectives.
B. employees have fundamentally different objectives.
C. employees need government assistance to solve differences.
D. banks provide funding for g
CHAPTER 19 - VERTICAL INTEGRATION AND OUTSOURCING
When a corporation participates in more than one successive stage in a multi-stage
production process it is said to be:
A. vertically integrated.
B. completely outsourced.
C. engaged in preliminary contrac