Deck 7: When Other Firms Dont Respond

Question 1

Any point on the production possibilities frontier is called

A)unemployment.
B)inefficient.
C)unobtainable.
D)full employment.

Answer 1

full employment.

Question 2

Which model tends to focus on the internal assets of a company?

A)five-forces model
B)resource-based model
C)supply and demand model
D)profit-maximization model

Answer 2

resource-based model

Question 3

The thing or things that a company does better than its competitors is called its

A)comparative advantage
B)absolute advantage
C)core competency
D)positive externality

Answer 3

core competency

Question 4

Brand names are

A)generally not a source of power
B)free
C)costly
D)an enforceable contract

Question 5

A brand name can affect a firm's

A)price elasticity of demand
B)average total cost curve
C)normal profit
D)balance sheet

Question 6

What is not included in Porter's five forces representation?

A)the threat of new entrants.
B)the threat of substitute products.
C)the indifference of customers.

Question 7

VRIN or VRIO is an example of a

A)five forces model
B)resource-base model
C)supply and demand model
D)dark-side model

Question 8

Which of the following cannot be a factor that gives it a competitive advantage?

A)a patent
B)reproducible capabilities
C)a brand name
D)distinctive capabilities

Question 9

A graphical representation of the choices between two allocations of resources is called

A)the production possibilities frontier.
B)supply and demand.
C)the free choice model.
D)the moral hazard model.

Question 10

Michael Potter argued that ____ led to firms earning economic profit over extended periods of time.

A)the ease of substitution
B)market power
C)the extent of consumer power
D)degree of competition from foreign tariffs

Question 11

Any point outside the production possibilities frontier is called

A)unobtainable.
B)full employment.
C)unemployment.
D)inefficient.

Question 12

Warranties and guarantees can serve as a(n)

A)barrier to entry
B)brand name
C)incomplete contract
D)source of competition

Question 13

What type of market exhibits product differentiation?

A)perfect competition
B)monopolistic competition
C)oligopoly
D)monopoly

Question 14

Any point inside the production possibilities frontier is called

A)full employment.
B)unemployment.
C)efficient.
D)unobtainable.

Question 15

In which market type does the firm face the most inelastic demand curve?

A)perfect competition
B)monopolistic competition
C)monopoly
D)oligopoly

Question 16

A firm in which market has the most market power?

A)perfect competition
B)monopolistic competition
C)oligopoly
D)monopoly

Question 17

In which market type does one find the most advertising

A)monopolistic competition
B)oligopoly
C)perfect competition
D)monopoly

Question 18

The best practices frontier is similar in construction and meaning to the

A)the cost frontier.
B)the absolute advantage frontier.
C)production possibilities frontier.
D)the supply and demand diagram.

Question 19

What type of market has few sellers?

A)perfect competition
B)monopolistic competition
C)oligopoly
D)monopoly

Question 20

In what market type does an individual firm face a perfectly elastic demand curve?

A)perfect competition
B)monopolistic competition
C)oligopoly
D)monopoly

Question 21

A brand name can be a source of market power.

Question 22

A unique resource can serve as

A)an economic profit
B)a sunk cost
C)an entry barrier
D)none of these choices

Question 23

Competitive advantage is not synonymous with comparative advantage.

Question 24

Limit pricing is also referred to as

A)competitive pricing
B)fair pricing
C)predatory pricing
D)all of these choices.

Question 25

A price that discourages entry is called a

A)fair price
B)limit price
C)minimum price
D)all of these choices

Question 26

There are many firms in an oligopolistic market.

Question 27

In terms of the best practices frontier, a long term strategy

A)shifts the frontier
B)moves a firm along a frontier
C)may cause a firm to move inside the frontier
D)may rotate the frontier toward the horizontal axis

Question 28

Pricing policy can serve as a barrier to entry.

Question 29

Monopolies do not last in the long-run.

Question 30

Porter's five forces model is trying to identify things that leads to a company's success.

Question 31

A best practices frontier can be used to describe short and long term strategies.

Question 32

The threat of substitutes is held constant in Porter's five forces model.

Question 33

Firms in perfect competition sell differentiated products.

Question 34

Sunk costs can be controlled after they are paid.

Question 35

A limit price is never a predatory price.

Question 36

The bargaining power of customers is not one of Porter's five forces.

Question 37

The size of a firm relative to the size of the market can be referred to as

A)an economic profit guarantee
B)a marginal profit factor
C)core competency
D)economies of scale

Question 38

A production possibilities frontier cannot be used to show choice.