Question 1

In the study of the demand for fast food, the income elasticity of demand was estimated to be:
A) statistically insignificant and elastic.
B) statistically insignificant and inelastic.
C) statistically insignificant and unitary elastic.
D) zero.

Accepted Answer

If the income elasticity of demand is statistically insignificant and inelastic, it means that changes in income have little to no effect on the quantity demanded for fast food, indicating that demand is not responsive to income changes.

Question 2

When Wal-Mart arrived in Mexico, the food retailing sector was comprised of a handful of national supermarket chains.

Accepted Answer

When Wal-Mart entered the Mexican market, the food retailing sector was dominated by a few national supermarket chains, which were the primary competitors at the time.

Question 3

The lack of success of some Walt Disney movies had:
A) a negative impact on Happy Meal sales.
B) a positive impact on Happy Meal sales.
C) no impact on Happy Meal sales.
D) none of the above.

Accepted Answer

The lack of success of some Walt Disney movies had a negative impact on Happy Meal sales because fewer people were interested in buying the toys that came with the meals.

Question 4

McDonald's was able to avoid currency problems with respect to global operations through:
A) the options market.
B) the futures market.
C) currency hedges.
D) barter arrangements.

Accepted Answer

The answer of McDonald's was able to avoid currency problems...

Question 5

In the study of the demand for fast food, the researchers based the study on the concept that consumers react to:
A) only the money price.
B) only the value of time spent in acquiring the food.
C) both the money price and the value of time spent in acquiring the food.
D) none of the above.

Accepted Answer

Consumers consider both the money price and the time cost when deciding on fast food purchases, as both factors contribute to the overall cost and convenience of the purchase.

Question 6

In China, investment is largely financed through the equity markets.

Accepted Answer

In China, investment is largely financed through bank loans rather than equity markets.

Question 7

McDonalds has traditionally been popular among Chinese children.

Accepted Answer

McDonalds has been popular among Chinese children due to its fun and colorful branding, as well as the appeal of fast food and toys.

Question 8

McDonalds kept its U.S.-based menu when entering the Chinese market.

Accepted Answer

McDonalds adapted its menu to cater to Chinese taste preferences when entering the Chinese market.

Question 9

In the study of the demand for fast food, the price elasticity of demand was estimated to be:
A) statistically significant and elastic.
B) statistically significant and inelastic.
C) statistically significant and unitary elastic.
D) zero.

Accepted Answer

The price elasticity of demand measures the responsiveness of quantity demanded to changes in price. A statistically significant and elastic price elasticity of demand means that a 1% increase in price will lead to a greater than 1% decrease in quantity demanded. This suggests that consumers are sensitive to changes in price and will reduce their consumption of fast food if the price increases.

Question 10

McDonald's is unique in the fast food industry in that it:
A) is the oldest fast food chain.
B) owns much of its real estate or has it tied up in long-term leases.
C) only operates in the U.S.
D) none of the above.

Accepted Answer

McDonald's is known for its business model of owning or having long-term leases on the land and buildings where its restaurants are located, which is a significant aspect of its financial strategy.

Question 11

Multinational corporations always confront local legislation and institutions in terms of hiring and employment practices.

Accepted Answer

Multinational corporations operate in different countries, each with its own laws and regulations regarding hiring and employment practices.

Question 12

In the study of the demand for fast food, the variables gasoline consumption per capita and population density were included as:
A) proxies for substitute goods.
B) proxies for travel distance and cost.
C) proxies for opportunity cost of time.
D) none of the above.

Accepted Answer

Gasoline consumption per capita and population density are used as proxies for travel distance and cost, as they can influence how far and how often people travel to access fast food, impacting demand.

Question 13

In the study of the demand for fast food, the authors measure the targeting of fast food to children and differential consumption by other age groups by including what variables in the demand function?
A) Age variables.
B) Ethnic variables.
C) Regional indicator variables.
D) None of the above.

Accepted Answer

Age variables are included in the demand function to measure the targeting of fast food to children and differential consumption by other age groups.

Question 14

In terms of location decisions, firms evaluate the infrastructure of the area in terms of access to transportation as well as the quality of life.

Accepted Answer

Firms consider both transportation access and quality of life when making location decisions.

Question 15

To counter parents' concerns about fast foods and childhood obesity, McDonalds considered
A) a variety of menu items such as milk shakes and candy.
B) a variety of menu items such as apple slices, fruit juices, peanut butter and jelly sandwiches, and carrot sticks.
C) not changing the menu.
D) all of the above.

Accepted Answer

Offering healthier menu options such as apple slices, fruit juices, peanut butter and jelly sandwiches, and carrot sticks would address parents' concerns about fast foods and childhood obesity. Including a variety of healthier options can also attract health-conscious customers, giving McDonalds a competitive edge. The other options (A and C) do not effectively address parents' concerns about fast foods and childhood obesity.

Question 16

To cut costs in the face of declining demand and increased competition, many fast food restaurants have focused on reducing:
A) labor costs.
B) utility costs.
C) paper napkin costs.
D) none of the above.

Accepted Answer

The answer of To cut costs in the face of...

Question 17

As McDonald's expanded globally, it was able to achieve:
A) economies of scope.
B) economies of scale.
C) diseconomies of scale.
D) none of the above.

Accepted Answer

McDonald's was able to achieve economies of scale as it expanded globally. This means that as it increased its size and output, it was able to lower its costs per unit, making it more efficient and profitable. By standardizing its operations and menu across different markets, they were able to achieve cost efficiencies in sourcing, production, and distribution.

Question 18

An upward shift of the average product and marginal product curve means an upward shift of the average cost curves.

Accepted Answer

An upward shift of the average product and marginal product curves indicates increased productivity, which typically leads to a downward shift in the average cost curves, as costs per unit decrease with higher productivity.

Question 19

In terms of location decisions, firms evaluate the extent to which the labor force is unionized.

Accepted Answer

The extent to which the labor force is unionized is often a factor that firms consider when making location decisions. Unions can impact the cost of labor, employee benefits, and the overall labor relations climate, all of which can affect a firm's competitiveness and profitability.

Question 20

In the study of the demand for fast food, the female labor force participation rate was included as a measure of the:
A) travel distance and cost.
B) opportunity cost of time.
C) employment.
D) none of the above.

Accepted Answer

The opportunity cost of time is the value of the time that a person could have spent working instead of doing something else, such as eating fast food. The female labor force participation rate is a measure of the percentage of women who are working or looking for work. This rate is a good measure of the opportunity cost of time for women, as it indicates how much time they have available to work.

Quiz 16: Combining Micro and Macro Analysis for Managerial Decision Making

In the study of the demand for fast food, the income elasticity of demand was estimated to be:

When Wal-Mart arrived in Mexico, the food retailing sector was comprised of a handful of national supermarket chains.

The lack of success of some Walt Disney movies had:

McDonald's was able to avoid currency problems with respect to global operations through:

In the study of the demand for fast food, the researchers based the study on the concept that consumers react to:

In China, investment is largely financed through the equity markets.

McDonalds has traditionally been popular among Chinese children.

McDonalds kept its U.S.-based menu when entering the Chinese market.

In the study of the demand for fast food, the price elasticity of demand was estimated to be:

McDonald's is unique in the fast food industry in that it:

Multinational corporations always confront local legislation and institutions in terms of hiring and employment practices.

In the study of the demand for fast food, the variables gasoline consumption per capita and population density were included as:

In the study of the demand for fast food, the authors measure the targeting of fast food to children and differential consumption by other age groups by including what variables in the demand function?

In terms of location decisions, firms evaluate the infrastructure of the area in terms of access to transportation as well as the quality of life.

To counter parents' concerns about fast foods and childhood obesity, McDonalds considered

To cut costs in the face of declining demand and increased competition, many fast food restaurants have focused on reducing:

As McDonald's expanded globally, it was able to achieve:

An upward shift of the average product and marginal product curve means an upward shift of the average cost curves.

In terms of location decisions, firms evaluate the extent to which the labor force is unionized.

In the study of the demand for fast food, the female labor force participation rate was included as a measure of the: