MANAGEGIAL ECONOMICS AND ORGANIZATIONAL ARCHITECTURE 5Th Edition  "AUTHORS BRICKLEY ZIMMERMAN & SMITH" QUESTION 1 1.The text makes it clear that the management innovations of the 1980s and 1990s: were almost all instant successes. waxed and waned in use and popularity. were instantly mostly failures. were creations of the press and were never implemented in business. QUESTION 2 2. If transactions costs can be reduced in a market place, then　total producer and consumer surplus will: increase. stay the same. decrease. None of the above. QUESTION 3 3. If a manager complies with all laws and regulations, then he can be confident that: he is completely ethical. he is fairly unethical. he has begun to deal with ethical issues. he will never run into ethical problems at work. QUESTION 4 4. As a firm's market power in　pricing decreases, the price elasticity of its demand: stays the same. decreases. is equal to one. increases. QUESTION 5 5. If a management innovation is going to be successful, it needs to address: decisioin making assignment should rest with the CEO. incentive and reward systems. shareholders' concerns. the rights of the Board of Directors QUESTION 6 6. Ethics is about making good decisions. Sometimes it is hard to see what economics has to do with ethics until you remember that economics is often defined as the: science of choice. key branch of theology. disciple with high moral standards. area that understand nothing about ethics. QUESTION 7 7. Martha Steward seems to have made a bad decisison concerning the use of insider information in selling ImClone stock. The resulting negative publicity on the issue caused value of her corporation, Martha Steward Living, to fall by　almost half. This example is suposed to show. insider trading can pay off in certtain circunstances. ethics and wealth creation are not linked in any way. Stock markets are fickle stewards of wealth. Ethics and wealth creation are closaely linked. QUESTION 8 8. Strategy refers to the general policies that managers adopt to: costs. the number of customers at the same price. the rate of technological change. the generation of profits. QUESTION 9 9. Competitive markets ususally promote the efficient use of resources.　 This is because: resource owners bear the wealth effects of their decision. managers always have proper incentives to make decisisons. consumers usually provide the lists of corporate mistakes. markets usually make equitable choices first. QUESTION 10 10. Finding a way to create and capture value is part of: business strategy cost control systems. management control, but not general management. allowing the market to run a company's future plans. QUESTION 11 11. One of the problems with making all the decisions at the top of a business orgnization is costliness of: specific information. gener.

1. MANAGEGIAL ECONOMICS AND ORGANIZATIONAL
ARCHITECTURE 5Th Edition
"AUTHORS BRICKLEY ZIMMERMAN & SMITH"
QUESTION 1
1.The text makes it clear that the management innovations of
the 1980s and 1990s:
were almost all instant successes.
waxed and waned in use and popularity.
were instantly mostly failures.
were creations of the press and were never implemented in
business.
QUESTION 2
2. If transactions costs can be reduced in a market place, then
total producer and consumer surplus will:
increase.

2. stay the same.
decrease.
None of the above.
QUESTION 3
3. If a manager complies with all laws and regulations, then he
can be confident that:
he is completely ethical.
he is fairly unethical.
he has begun to deal with ethical issues.
he will never run into ethical problems at work.

3. QUESTION 4
4. As a firm's market power in pricing decreases, the price
elasticity of its demand:
stays the same.
decreases.
is equal to one.
increases.
QUESTION 5
5. If a management innovation is going to be successful, it
needs to address:
decisioin making assignment should rest with the CEO.
incentive and reward systems.

4. shareholders' concerns.
the rights of the Board of Directors
QUESTION 6
6. Ethics is about making good decisions. Sometimes it is hard
to see what economics has to do with ethics until you remember
that economics is often defined as the:
science of choice.
key branch of theology.
disciple with high moral standards.
area that understand nothing about ethics.
QUESTION 7

5. 7. Martha Steward seems to have made a bad decisison
concerning the use of insider information in selling ImClone
stock. The resulting negative publicity on the issue caused value
of her corporation, Martha Steward Living, to fall by almost
half. This example is suposed to show.
insider trading can pay off in certtain circunstances.
ethics and wealth creation are not linked in any way.
Stock markets are fickle stewards of wealth.
Ethics and wealth creation are closaely linked.
QUESTION 8
8. Strategy refers to the general policies that managers adopt to:
costs.
the number of customers at the same price.

6. the rate of technological change.
the generation of profits.
QUESTION 9
9. Competitive markets ususally promote the efficient use of
resources. This is because:
resource owners bear the wealth effects of their decision.
managers always have proper incentives to make decisisons.
consumers usually provide the lists of corporate mistakes.
markets usually make equitable choices first.
QUESTION 10

7. 10. Finding a way to create and capture value is part of:
business strategy
cost control systems.
management control, but not general management.
allowing the market to run a company's future plans.
QUESTION 11
11. One of the problems with making all the decisions at the top
of a business orgnization is costliness of:
specific information.
general information.
advanced technology.

8. market power.
QUESTION 12
12. A firm with market power in pricing faces:
a flat demand curve.
a vertical demand curve in all cases.
a price inelastic demand curve.
a downward sloping demand curve.
QUESTION 13
13. For decision making for the firm with market power, fixed
costs are:

9. a key element in the markup.
irrelevant.
the same as marginal csts.
opportunity costs of production.
QUESTION 14
14. Outsourcing is a management innovation that emphasizes:
vertical integration of production and service.
assignment of management and production responsibilities to
another firm.
reduction of purchase of resources to the bare essentials.
hiring only managers eduacated in naother state.

10. QUESTION 15
15. As opposed to corporate strategy, business strategy is
focused on:
cost control of fixed costs.
demand management.
the choice of industries in which to produce.
the choice of how to compete with other firms in the industry
QUESTION 16
16. The three legs of the organizational stool are reward
systems. performance evaluation systems, and:
influence costs.

11. decentralization.
decision rights.
market technology
QUESTION 17
17. Role models, company folklore, and rituals are:
key components of corporate culture.
not part of most companies' corporate culture.
not a consideration in an economic analyssis of organizational
architecture.
typical of village economies, but not corporate economies.

12. QUESTION 18
18. Ethics can be defined as:
virtuos behavior.
following the letter of the law.
employing people with minority status.
a philosophy that believes the 'ends justify the means.'
QUESTION 19
19. A key factor in TQM is the:
reduction of defects.
increase in management inspection stations.

13. reduction of the price of supplies.
movement away from technology advance and a reliance on
simple production techniques.
QUESTION 20
20. If a firm prices its output at marginal cost- the competitive
solution - then gains from trade are:
all in producer surplus.
split between producer and consumer surplus.
all in consumer surplus.
split in a Nash solution.