Deck 1: Introduction

Question 1

Innovation and new technologies have led to longer product life cycles and lowered product obsolescence.

Answer 1

False

Question 2

The majority of effort and money invested in technological innovation comes from non-industrial firms.

Answer 2

False

Question 3

Investing in process innovation helps firms lower their costs.

Answer 3

True

Question 4

If a business discharges untreated chemical waste into local water bodies,it imposes a negative externality on the community members.

Question 5

Technological innovations decrease:

A) the variety of goods consumers can purchase.
B) the need for differentiation among competitors.
C) the time required to design and produce new products.
D) the use of common components between different models of the same product.

Question 6

A firm's organizational structure and control systems have no influence on the generation of innovative ideas.

Question 7

As a result of the rapid pace of innovation:

A) product life cycles have become short.
B) product development cycles have become long.
C) market segmentation has reduced.
D) product obsolescence has slowed down.

Question 8

The innovation process is often conceived of as a funnel,because most potential new product ideas make it through the development process.

Question 9

According to the concept of innovation funnel,the number of successful products launched will be greater than the number of raw ideas generated.

Question 10

Externalities are costs that are borne by individuals other than those responsible for creating them.

Question 11

Firms that charge headlong into new product development usually have short development cycles.

Question 12

Which of the following is true of technological innovations?

A) Technological innovations help increase a country's gross domestic product.
B) Technological innovations decrease the amount of output achievable from a given quantity of labor and capital.
C) Technological innovations slow down the product development cycles and product obsolescence.
D) Technological innovations increase production costs and reduce product differentiation.

Question 13

The _____ of an economy is its total annual output,measured by the final purchase price.

A) balance of payment
B) gross domestic product
C) cash reserve ratio
D) net national income

Question 14

Technological innovation results in complete eradication of negative externalities.

Question 15

Globalization of markets has reduced the importance of innovation.

Question 16

Most innovative ideas do not become successful new products.

Question 17

Technological innovation decreases the amount of output achievable from a given quantity of labor and capital.

Question 18

Flexible manufacturing technologies have increased the importance of production economies of scale.

Question 19

According to the concept of the innovation funnel,one new idea is usually responsible for several new products.

Question 20

GDP does not relate directly to the amount of goods consumers can purchase.

Question 21

Why is it important that a company have a well-defined process for strategically managing its new product development process?

Question 22

Explain how computer-aided design and flexible manufacturing technologies help create small niches in the market place.Provide an example to illustrate your answer.

Question 23

Which of the following is true of externalities?

A) All externalities are negative in nature.
B) They are only borne by individuals responsible for creating them.
C) Technological innovation results in complete eradication of negative externalities.
D) Externalities can be in the form of benefits reaped by individuals.

Question 24

Walter is the new director of R&D at Good Health,a pharmaceutical company.Which of the following statements,made by Walter,indicates that he believes in the concept of the innovation funnel?

A) "Innovation is a freewheeling process that is unconstrained by rules and plans."
B) "While there are many potential new product ideas going in the wide end, very few make it through the development process."
C) "I believe that Good Health should limit new idea generation to save time and other resources."
D) "I believe that Good Health should allow all new ideas generated in the company to make it to the development process."

Question 25

Electronic waste results from the disposal of technological goods.This is an example of:

A) the opportunity cost borne by the companies.
B) a negative externality.
C) a negative variance.
D) the innovation funnel.

Question 26

_____ refer to costs (or benefits) of technological innovations that are borne by individuals other than those responsible for creating them.

A) Externalities
B) Innovation funnels
C) Opportunity costs
D) Cultural lags

Question 27

If a business builds a park in a community,it creates a(n) _____ for community members.

A) social cost
B) positive externality
C) opportunity cost
D) negative variance

Question 28

If a country's GDP stands at 4,867 billion USD,it means the country's ____ is worth 4,867 billion USD.

A) total annual output
B) investment on technological innovation
C) savings with the World Bank
D) negative variance in budget

Question 29

Unicorn Medicines,a pharmaceutical company based in the United States,has its research and development units spread across the globe.These research and development units have lately not been receiving adequate financial support.Which of the following is typically the cause for such a situation?

A) Technical innovation leads to lower market segmentation and slower product obsolescence.
B) Most innovative ideas do not become successful new products.
C) The product development cycle in the pharmaceutical industry is short.
D) The cost associated with pharmaceutical research and development is low.

Question 30

Silk Work Inc.,a manufacturer of silk garments,is planning to replace hand weaving with some modern machines that run on fuel.Which of the following consequences of this measure can be categorized as a negative externality?

A) Increased amount of output achievable from the given quantity of labor.
B) Increase in the quality of the silk garments.
C) Increased pollution as a result of the new technology.
D) Increased need for investment to finance the modernization.

Question 31

The Solow Residual refers to the:

A) obsolete products left in the market due to the accelerated product life cycle.
B) less developed nations of the world being left behind due to their obsolete technology.
C) increased amount of output achievable from a given quantity of labor and capital due to technological innovation.
D) process of dumping goods in developing and underdeveloped countries at a price lower than the home-market price.

Question 32

Explain how an understanding of the innovation funnel might influence a company's view of research and development?

Question 33

Technology is in its purest essence _____.

A) knowledge
B) trial and error
C) experimentation
D) guesswork

Question 34

What are the some of the negative impacts on society due to technological innovation? How would you answer critics of technological innovation who cite these negative impacts?

Question 35

The innovation process is often conceived of as a funnel because:

A) most innovative ideas become successful new products.
B) it decreases the amount of output achievable from a given quantity of labor and capital.
C) it increases the importance of production economies of scale.
D) there are many potential new product ideas and only a few make it through the development process.

Question 36

Jordan,the CEO of Early Bird,believes that it is important to focus on the quantity of new product ideas generated rather than the quality of ideas generated.He encourages everyone in the company to come up with product ideas,and those that seem feasible are further developed.According to him,it takes several raw ideas to develop one successful new product.Jordan's views reflect the concept of:

A) innovation quotient.
B) innovation diffusion.
C) innovation readiness.
D) innovation funnel.

Question 37

Explain how the globalization of markets affects the importance of innovation.

Question 38

Technological innovations increase:

A) the gross domestic product of an economy.
B) product life cycles.
C) the time required for product development and introduction.
D) the production costs of multiple product variations.

Question 39

The innovation process at Jupiter Inc.starts with the generation of raw ideas,followed by development of small projects,which later become major developments,and the process finally ends with product launches.According to the concept of "innovation funnel",the wide end of the funnel is occupied by:

A) raw ideas generated.
B) product launches.
C) major developments.
D) small projects.

Question 40

Virtual Inc.,a manufacturing company,has recently entered into the cell phone industry.This industry is characterized by rapid technological innovations.Which of the following is an implication for Virtual Inc.?

A) The life cycle of its cell phones will be very long.
B) It will face rapid product obsolescence.
C) It will face low market segmentation in the cell phone industry.
D) It will face lower need for product differentiation.