Deck 24: Online Developments:

Question 1

Penquin Ltd.agrees with Apple Corporation to use the "agency" model of setting prices and paying commissions on the sales of e-books for iPads.Under this model, publishers

A)set their own prices.
B)price e-books below cost to sell more e-book readers.
C)match Amazon.com's e-book prices.
D)agree to sell e-books exclusively through certain "agents."

Answer 1

A

Question 2

Vid Games, Inc., is a U.S.company currently involved in significant innovation and cost and quality competition with its rivals.With respect to the direction and control of Vid and its competitors in the United States and other countries, different models of corporate governance exist, depending on

A)the degree of capitalism in a particular nation.
B)the effect of innovation on the operations of a particular company.
C)the extent of cost efficiency in a particular corporation.
D)the quality of the products and services of a particular firm.

Answer 2

A

Question 3

Cool Corporation makes energy-saving air conditioning units.Cool anticipates a change in the demand for its products as a consequence of climate change.One argument in favor of requiring Cool to disclose this information is that it could lead to

A)additional protections under the Sarbanes-Oxley Act of 2002.
B)an increase in the number of shareholder suits against competitors.
C)sound investment decisions by investors.
D)the conversion of Cool from publicly held to privately held.

Answer 3

C

Question 4

Ray-On Corporation makes inexpensive, highly efficient, solar energy cells.Ray-On anticipates a change in the demand for its products as a consequence of climate change.According to the Securities and Exchange Commission, Ray-On should

A)disclose this information.
B)keep this information confidential.
C)reveal this information to insiders only if asked.
D)release this information to current shareholders only.

Question 5

Deutsche Werke, GmbH., a German firm, is harmed by a price-fixing scheme engineered by Collider Industries, S.A., an international cartel.The European Union is most likely to

A)actively pursue Collider and impose civil penalties.
B)actively pursue Collider and impose criminal penalties.
C)contact Collider and issue a reprimand but impose no penalties.
D)do nothing.

Question 6

The U.S.Department of Justice files a suit against Random House, Inc., and other major book publishers, charging that they conspired to fix the prices of e-books.One result of limiting e-book price competition is that consumers

A)pay more for e-books than they otherwise would have paid.
B)pay less for e-books than they otherwise would have paid.
C)have fewer choices of books to buy.
D)have more choices of books to buy.

Question 7

DeLuxe, S.A., is a French company with offices and operations located throughout Europe.With respect to the direction and control of DeLuxe and other firms in continental Europe, the prevailing coordinated model of corporate governance gives priority to the interests of a corporation's

A)directors.
B)executive and financial officers.
C)shareholders.
D)stakeholders-employees, managers, suppliers, customers, and the community.

Question 8

Etoile Metrics, S.A., a French software firm, is harmed by an exclusive-dealing scheme engineered by Flash Search, Inc., a U.S.software firm.Compared to U.S.laws, the European Union's laws

A)define less conduct as anticompetitive.
B)define more conduct as anticompetitive.
C)declare the same conduct-not more or less-to be anticompetitive.
D)include less detailed provisions on monopolization.