Question 1

Which of the following is not a characteristic of a complete contract?

Accepted Answer

A) The contract allows for a party to exploit weaknesses in another party's position as the transaction unfolds 
B) Elimination of opportunistic behaviors 
C) Stipulation of each party's responsibilities and rights 
D) Binding instruction for each party on courses of action as the transaction unfolds 
E) Must be enforceable 
A) The contract allows for a party to exploit weaknesses in another party's position as the transaction unfolds 
B) Elimination of opportunistic behaviors 
C) Stipulation of each party's responsibilities and rights 
D) Binding instruction for each party on courses of action as the transaction unfolds 
E) Must be enforceable

Question 2

What do the vertical boundaries of a firm refer to?

Accepted Answer

A) The activities the firm itself performs versus purchases from independent firms 
B) The level of expertise of the firm's workforce 
C) The breadth of products a firm produces 
D) The production output level for a firm 
E) The chain of production processes from raw materials to finished good 
A) The activities the firm itself performs versus purchases from independent firms 
B) The level of expertise of the firm's workforce 
C) The breadth of products a firm produces 
D) The production output level for a firm 
E) The chain of production processes from raw materials to finished good

Question 3

What are agency costs?

Accepted Answer

A) Costs of the sales force 
B) Costs associated with slack effort and with the administrative controls to deter it 
C) Costs related to general and administrative expenses 
D) Costs associated with outsourcing of firm functions 
E) Costs attributed to the use of professional service firms 
A) Costs of the sales force 
B) Costs associated with slack effort and with the administrative controls to deter it 
C) Costs related to general and administrative expenses 
D) Costs associated with outsourcing of firm functions 
E) Costs attributed to the use of professional service firms

Question 4

What problem preventing complete contracts refers to the limits on the capacity of individuals to process information,deal with complexity and pursue rational aims?

Accepted Answer

A) Agency costs 
B) Bounded rationality 
C) Performance measurement difficulties 
D) Asymmetric information 
E) Contract body of law 
A) Agency costs 
B) Bounded rationality 
C) Performance measurement difficulties 
D) Asymmetric information 
E) Contract body of law

Question 5

What are influence costs?

Accepted Answer

A) Costs associated with slack effort and with the administrative controls to deter it 
B) The cost of activities aimed at affecting the distribution of benefits in an organization 
C) Costs related to the negotiation of external contracts 
D) Costs of recruiting ("buying")outside employees with a particular skill set 
E) The costs of advertising to customers 
A) Costs associated with slack effort and with the administrative controls to deter it 
B) The cost of activities aimed at affecting the distribution of benefits in an organization 
C) Costs related to the negotiation of external contracts 
D) Costs of recruiting ("buying")outside employees with a particular skill set 
E) The costs of advertising to customers

Which of the following is not a characteristic of a complete contract?

What do the vertical boundaries of a firm refer to?

What are agency costs?

What problem preventing complete contracts refers to the limits on the capacity of individuals to process information,deal with complexity and pursue rational aims?

What are influence costs?

Basic Microeconomic Principles

Economies of Scale and Scope

Agency and Coordination

The Power of Principles - an Historical Perspective

Organizing Vertical Boundariesvertical Integration and Its Alternatives

Diversificationpart Threemarket and Competitive Analysis

Competitors and Competition

Strategic Commitment

The Dynamics of Pricing Rivalry

Entry and Exit

Industry Analysispart Fourstrategic Position and Dynamics

Strategic Positioning for Competitive Advantage

Sustaining Competitive Advantage

The Origins of Competitive Advantage, innovation, evolution, and Environment part Five internal Organization

Performance Measurement and Incentives in Firms

Strategy and Structure

Environment, power, and Culture

Filters

Exam 5: The Vertical Boundaries of the Firm

Which of the following is not a characteristic of a complete contract?

What do the vertical boundaries of a firm refer to?

What are agency costs?

What problem preventing complete contracts refers to the limits on the capacity of individuals to process information,deal with complexity and pursue rational aims?

What are influence costs?

Basic Microeconomic Principles

Economies of Scale and Scope

Agency and Coordination

The Power of Principles - an Historical Perspective

Organizing Vertical Boundariesvertical Integration and Its Alternatives

Diversificationpart Threemarket and Competitive Analysis

Competitors and Competition

Strategic Commitment

The Dynamics of Pricing Rivalry

Entry and Exit

Industry Analysispart Fourstrategic Position and Dynamics

Strategic Positioning for Competitive Advantage

Sustaining Competitive Advantage

The Origins of Competitive Advantage, innovation, evolution, and Environment part Five internal Organization

Performance Measurement and Incentives in Firms

Strategy and Structure

Environment, power, and Culture

Filters