Microeconomics for Managers
Chapter Exam Questions
Course Introduction
Microeconomics for Managers provides an in-depth exploration of core microeconomic concepts with a direct emphasis on managerial decision-making. The course examines how individuals and firms make choices regarding resource allocation, production, pricing, and competition under various market structures. Through real-world case studies and quantitative analysis, students learn to apply microeconomic reasoning to issues such as cost analysis, consumer demand, market equilibrium, pricing strategies, and government regulation. The course is designed to equip future managers with critical analytical tools to inform strategic business decisions in dynamic and competitive environments.
Recommended Textbook
Economics of Strategy 6th Edition by David
Besanko
Available Study Resources on Quizplus
14 Chapters
419 Verified Questions
419 Flashcards
Source URL: https://quizplus.com/study-set/1331
Page 2
Chapter 1: The Power of Principles: an Historical Perspective
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26572
Sample Questions
Q1) What is a key issue facing managers of the 2000s with respect to production technology?
A) Using the technology while maintaining an adequate level of complexity vs. simplicity
B) Balancing price of the technology with the benefits of its use
C) The choice between reformulating strategies and reorganizing or using the technologies for incremental improvements
D) Integrating CAD/CAM into their factories
E) Ensuring all parties understand the technology
Answer: C
Q2) What is the accounting concept inventory turnover as developed by Sears in the late 19 century?
A) To systemize and circulate credit information
B) To manage the requirements of operating efficiencies
C) To publicly disclose the details of a firm's operations
D) To present the payment of dividends out of profits
E) To link profits to fluctuations in sales volume
Answer: E
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Economies of Scale and Scope
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26573
Sample Questions
Q1) Which of the following is not a product specific fixed cost?
A) The cost to manufacture a special die to make an aircraft fuselage
B) The cost of developing graphics software to facilitate video game development
C) The cost of a one-week training program preceding the implementation of a specific management initiative
D) The time and expense required to set up a textbook before printing it
E) The cost of administrative expenses
Answer: E
Q2) Which of the following is not a reason a supplier might seek to sell in bulk?
A) Each sale incurs a fixed cost in writing a contract
B) The purchaser is likely to switch over a small price due to the gains over the large number of units ordered
C) Each sale involves setting up a different production run
D) The cost of delivery is a fixed on a per unit basis
E) The supplier fears uneven sales
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
Chapter 3: The Vertical Boundaries of the Firm
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26574
Sample Questions
Q1) Under what circumstance would it be logical to leave contracts vague and open-ended?
A) When performance may be ambiguous or difficult to measure.
B) When one of the firms in the contract is much larger than the other firm
C) If there are many other firms that can provide the same service or product
D) When the cost of writing the contract is too high
E) If the smaller of the two contracting firms is the upstream firm
Answer: A
Q2) Suppose you manufacture 10 million hard drives per year specifically for Dell laptop computers.Suppose your average variable cost C=$20/unit,annualized cost of investment to build a hard drive factory I=$30 million,and the market price (bailout market price in the event Dell does not buy)Pm=$22/unit.If Dell agrees to purchase the 10 million hard drives at a price P*=$25/unit and the deal subsequently falls apart,what is your company's "quasi-rent"?
Answer: $30 million
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Integration and Its Alternatives
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26575
Sample Questions
Q1) Which of the following is true with regard to the difference in exchange costs between an item produced internally firm and an item purchased from an outside supplier through an arm's length market transaction as the level of asset specificity increases?
A) The cost difference is positive for both low and high levels of specificity
B) The cost difference is negative for both low and high levels of specificity
C) The cost difference is negative for low and positive for high levels of specificity
D) The cost difference is positive for low and negative for high levels of specificity
E) As asset specificity increases, the transaction costs of the market exchange decrease
Q2) Why are the current health care systems on the rise being built around the integration of clinical information technology and disease management systems?
A) They both have high costs
B) They both are new trends in health care
C) They are easy to integrate
D) They do not require a significant investment to integrate
E) They both require asset specificity and coordination
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Competitors and Competition
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26576
Sample Questions
Q1) What is the term for examining consumers travel patterns?
a) Flow analysis
b) Travel analysis
c) Purchase location analysis
d) Consumer distance analysis
e) None of the above
Q2) Which of the following is not a characteristic of substitute products X and Y?
A) They have the same or similar product performance characteristics
B) They have the same or similar occasions for use
C) They are sold in the same geographic market
D) Customers are indifferent between X and Y
E) A price increase of X while keeping the Y's price constant leads to a drop in purchases of X and an increase in purchases of Y
Q3) In what type of market do the actions of individual firms materially affect the overall market?
A) Perfectly competitive
B) Monopolistically competitive
C) Oligopoly
D) Monopoly
E) Diversified
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Entry and Exit
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26577
Sample Questions
Q1) When is predatory pricing a most effective entry barrier?
A) When the incumbent has incurred them and the entrant has not
B) When incumbents have long-standing relationships with suppliers and customers
C) When channels are few and hard to replicate
D) When a firm has a reputation for toughness or competes in multiple markets
E) When marginal costs are low and flooding the market causes large price reductions
Q2) When is reputation a most effective entry barrier?
A) When the incumbent has incurred them and the entrant has not
B) When incumbents have long-standing relationships with suppliers and customers
C) When channels are few and hard to replicate
D) When a firm has a reputation for toughness or competes in multiple markets
E) When marginal costs are low and flooding the market causes large price reductions
Q3) Which of the following is not an exit barrier for firms in an industry?
A) Sunk costs
B) Labor agreements or commitments to purchase raw materials
C) Obligations to input suppliers
D) Excess capacity
E) Government restrictions
To view all questions and flashcards with answers, click on the resource link above.
8
Chapter 7: The Dynamics Competing Across Time
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26578
Sample Questions
Q1) How much revenue a firm brings in by improving the quality of a product such that more consumers want to buy it depends on which two factors?
A) The decrease in demand caused by the increase in quality and the incremental profit earned on each additional unit sold
B) The increase in demand caused by the increase in quality and the incremental profit earned on each additional unit sold
C) The increase in demand caused by the increase in quality and the incremental loss on each additional unit sold
D) The decrease in demand caused by the increase in quality and the incremental loss on each additional unit sold
E) The quality of changes to the original product and the decrease in demand cause by the changes in quality
Q2) Suppose Firm #1 dominates a market for widgets priced at $100/unit with a marginal cost of $60/unit.If Firm #2 enters the market and offers comparable widgets at a 3% discount,extending a price umbrella optimal as long as Firm #1 loses no more than what portion of its market share?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Industry Analysis
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26579
Sample Questions
Q1) What concept developed by Brandenburger and Nalebuff as a counterpart to Porter's five-forces consists of suppliers,customers,competitors and complementors?
A) McKinsey 7-S Framework
B) Value net
C) BCG Market Share Matrix
D) 6 C's of Marketing
E) 4 P's of Marketing
Q2) Which of the following is not a way teams "collude" within professional sports markets?
A) Agreeing on ticket prices
B) Agreeing on rules and schedules
C) Employing the same pool of referees
D) Sharing national broadcast revenues
E) Agreeing on rookie drafts
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Strategic Positioning for Competitive Advantage
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26580
Sample Questions
Q1) Select the letter corresponding to the best answer.For a given consumer,any price-quality combination along the indifference curve yields the _______________.
A) Same consumer surplus
B) Same maximum willingness-to-pay
C) High consumer surplus
D) Low consumer surplus
E) Same competitive advantage
Q2) Which of the following is a resource?
A) Brand promotion skills
B) Yield management capabilities
C) Ability to manage sourcing and procurement functions
D) Workers with firm-specific expertise or know-how
E) Ability to integrate order-taking, procurement, manufacturing and out-bound logistics
To view all questions and flashcards with answers, click on the resource link above.
Chapter 10: Information and Value Creation
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26581
Sample Questions
Q1) High quality certification in horizontally differentiated goods is aided by which of the following?
A) Outcome based scorecards
B) Internet firms like Google and Yahoo
C) Risk adjustment
D) Mean reversion
E) Firms paying for more scorecards
Q2) Which of the following is measured by a report card that assesses product performance?
A) Process
B) Inputs
C) Warrantees
D) Outcomes
E) Longevity
Q3) What term best describes a firm informing customers about a product's benefits?
A) Advertising
B) Certification
C) Disclosure
D) Notice
E) Broadcasting
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Sustaining Competitive Advantage
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26582
Sample Questions
Q1) Which of the following terms best describes a phenomenon whereby a profit-maximizing firm sticks with its current technology or product concept even though the profit-maximizing decision for a firm starting from scratch would be to choose a different technology or product concept?
A) The replacement effect
B) Strategic intent
C) Strategic stretch
D) Hypercompetition
E) The sunk cost effect
Q2) 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
To view all questions and flashcards with answers, click on the resource link above.
13
Chapter 12: Performance Measurement and Incentives
Available Study Resources on Quizplus for this Chatper
29 Verified Questions
29 Flashcards
Source URL: https://quizplus.com/quiz/26583
Sample Questions
Q1) Which of the following factors is an effective tool for companies to use to mitigate hidden action and hidden information problems in agency relationships?
A) Monitoring
B) Offshoring
C) Coordination
D) Objectives
E) Confrontation
Q2) Which of the following terms best describes a review system in which an employee and a supervisor work together to construct a set of goals for that employee?
A) Traditional top down review system
B) 360-degree peer review system
C) Management-by-objective system
D) Subjective performance evaluation
E) Pay-for-performance
To view all questions and flashcards with answers, click on the resource link above.
14
Chapter 13: Strategy and Structure
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26584
Sample Questions
Q1) In which of the following situations identified by Baron and Besanko will a matrix never be optimal regardless of any additional circumstances?
A) When spillovers are positively correlated and activities are profit complements
B) When activities are profit complements but spillovers are negatively correlated
C) If activities are profit substitutes and spillovers are positively correlated
D) If spillovers are negatively correlated and activities are profit substitutes
E) None of the above
Q2) In departmentalization,which of the following is a required step?
A) Specifying relationships between chosen dimensions
B) Allocating costs across departments
C) Creating agency alignment between departments
D) Identifying principals
E) None of the above
To view all questions and flashcards with answers, click on the resource link above.
15
Chapter 14: Environment, power, and Culture
Available Study Resources on Quizplus for this Chatper
30 Verified Questions
30 Flashcards
Source URL: https://quizplus.com/quiz/26585
Sample Questions
Q1) Which of the following terms best describes a transfer between two or more parties or resources,or rights to control resources,which occurs outside the terms of a market context?
A) Power exchange
B) Social exchange
C) Authority exchange
D) Knowledge exchange
E) Formal exchanges
Q2) Which of the following is not a way firms suffering from dependence relationships can take action to reduce their dependence on buyers or suppliers?
A) Vertical integration
B) Using a monopolist buyer/supplier
C) Long-term contracting
D) Joint ventures
E) Alliances
To view all questions and flashcards with answers, click on the resource link above.
16