Question 1

Marginal costs rise if there are increasing returns.

Accepted Answer

A) True 
 B)False  False

Question 2

Workers who deal with information are generally referred to as

Accepted Answer

A) non-productive workers. 
B) production workers. 
C) knowledge workers. 
D) migrant workers. 
A) non-productive workers. 
B) production workers. 
C) knowledge workers. 
D) migrant workers. C

Question 3

In the knowledge economy

Accepted Answer

A) the supply chain has been decomposed. 
B) property rights have been altered. 
C) increasing returns may occur more often. 
D) all of these choices. 
A) the supply chain has been decomposed. 
B) property rights have been altered. 
C) increasing returns may occur more often. 
D) all of these choices. D

Question 4

Some products of the knowledge economy

Accepted Answer

A) have an initial marginal cost that is very low and then rises. 
B) have no marginal costs. 
C) have an initial marginal cost that is very high and then falls to zero. 
D) none of these choices. 
A) have an initial marginal cost that is very low and then rises. 
B) have no marginal costs. 
C) have an initial marginal cost that is very high and then falls to zero. 
D) none of these choices.

Question 5

One of the results of the knowledge economy

Accepted Answer

A) is that content matters. 
B) is that the information content of a good can be distinguished from the physical product. 
C) is that the information content of a good cannot be distinguished from the physical product. 
D) is that the physical features of the product has become more important. 
A) is that content matters. 
B) is that the information content of a good can be distinguished from the physical product. 
C) is that the information content of a good cannot be distinguished from the physical product. 
D) is that the physical features of the product has become more important.

Question 6

A network must be small if network externalities are to be huge.

Accepted Answer

A) True 
 B)False

Question 7

Government picking winners

Accepted Answer

A) is the market model. 
B) is the central planning model. 
C) can be done with really good data. 
D) none of these choices. 
A) is the market model. 
B) is the central planning model. 
C) can be done with really good data. 
D) none of these choices.

Question 8

Increasing returns means that

Accepted Answer

A) each additional worker produces more than the worker before him/her. 
B) each additional worker costs less. 
C) marginal cost rises. 
D) technology is having a negative impact on production. 
A) each additional worker produces more than the worker before him/her. 
B) each additional worker costs less. 
C) marginal cost rises. 
D) technology is having a negative impact on production.

Question 9

Knowledge workers are becoming more common relative to production workers.

Accepted Answer

A) True 
 B)False

Question 10

Intellectual property rights are difficult to protect.

Accepted Answer

A) True 
 B)False

Question 11

It is difficult to create barriers to entry if the information content of a product can be separated from the physical aspects of the product.

Accepted Answer

A) True 
 B)False

Question 12

If marginal costs are virtually zero after initial units are produced

Accepted Answer

A) inventors need to sell lots of units to make money. 
B) inventors need to be paid upfront. 
C) inventors need to sell their patents. 
D) none of these choices. 
A) inventors need to sell lots of units to make money. 
B) inventors need to be paid upfront. 
C) inventors need to sell their patents. 
D) none of these choices.

Question 13

If marginal cost is zero a firm can still profit through pricing.

Accepted Answer

A) True 
 B)False

Question 14

Marginal costs rise if marginal product falls.

Accepted Answer

A) True 
 B)False

Question 15

Information

Accepted Answer

A) is difficult to own. 
B) is never a separate attribute of a product. 
C) is easy to connect to physical product. 
D) is not scarce in the knowledge economy. 
A) is difficult to own. 
B) is never a separate attribute of a product. 
C) is easy to connect to physical product. 
D) is not scarce in the knowledge economy.

Question 16

Network effects are seen in manufacturing sectors.

Accepted Answer

A) True 
 B)False

Question 17

Managers must monitor knowledge workers closely.

Accepted Answer

A) True 
 B)False

Question 18

The supply chain has change very little over the past 50 years.

Accepted Answer

A) True 
 B)False

Question 19

If a firm has large start-up costs and nearly zero marginal costs

Accepted Answer

A) the firm can profit by focusing on total cost. 
B) the firm cannot profit competing on marginal cost. 
C) the firm can make money by simply charging a price. 
D) the firm can profit competing on marginal cost. 
A) the firm can profit by focusing on total cost. 
B) the firm cannot profit competing on marginal cost. 
C) the firm can make money by simply charging a price. 
D) the firm can profit competing on marginal cost.

Question 20

Being first only works

Accepted Answer

A) if accounting profits are earned in the first year. 
B) if the entrepreneur has the working capital of a large firm. 
C) in a winner take all situation. 
D) all of these choices. 
A) if accounting profits are earned in the first year. 
B) if the entrepreneur has the working capital of a large firm. 
C) in a winner take all situation. 
D) all of these choices.

Exam 16: The Knowledge Economy

Marginal costs rise if there are increasing returns.

Workers who deal with information are generally referred to as

In the knowledge economy

Some products of the knowledge economy

One of the results of the knowledge economy

A network must be small if network externalities are to be huge.

Government picking winners

Increasing returns means that

Knowledge workers are becoming more common relative to production workers.

Intellectual property rights are difficult to protect.

It is difficult to create barriers to entry if the information content of a product can be separated from the physical aspects of the product.

If marginal costs are virtually zero after initial units are produced

If marginal cost is zero a firm can still profit through pricing.

Marginal costs rise if marginal product falls.

Information

Network effects are seen in manufacturing sectors.

Managers must monitor knowledge workers closely.

The supply chain has change very little over the past 50 years.

If a firm has large start-up costs and nearly zero marginal costs

Being first only works

Economics and Management

The Power of Markets and the Wealth of Nations

Spontaneous Order, Markets, and Market Failure

Spontaneous Order and the Firm

Organization of the Firm

Market Failures and Incentive Issues Inside the Firm

When Other Firms Dont Respond

When Other Firms React

The Entrepreneur and the Market Process

Strategies With Respect to Government

What Should the Firm Do

Demand and Revenue Management

Costs

The Mechanics of Profit Maximization

Pricing

The Corporate Form and the Cost of Capital

Internal Markets

Measuring Economic Profit

The Firm in a National and a Global Setting

Strategy Myths

Filters