Questions highlighted in green are relatively easier questions on which the class did not do well.Managing in Complex Environments QUIZ #2 (Forms A & B) Name (Last, First)_ ANSWERS ________ Spring Semester, 2013Professor Atkin My lecture time is: _____ PeopleSoft#_______________________This closed-book, closed-note quiz has 35 3-point questions to be answered on optical scansheets. To get a grade, you must return (a) the quiz, (b) the answer sheet, and (c) the completedpeer evaluation. Please take your time and read questions carefully. Good luck! PLEASE SEENOTES AT END.1. Assume the firm chooses to pursue a long-term project in which the expected benefits exactlyequal the expected costs (where both are adjusted for the time value of money, etc.). Other things equal, this project would be expected to generate ______ economic profit.a. positive b. zero c. negative d. insufficient information to determine2. “The time value of money” refers to…a. revenue generated by the firm b. exit costs c. switching costs d.inflation effects 3. A vertically integrated firm is most likely…a. a diversified firm b. profitable c. both of these d. none of these4. When we say an industry is attractive, we mean…a. industry rivals all earn positive NI b. the average profitability in the industry is stronglypositivec. customer power is low d. all of these5. All other things equal, a supply-side industry definition…a. is done from the perspective of the suppliers to the industryb. identifies more rivals than a demand-side definition c. both of the above d. none of these6. Empirical evidence suggests that…a. some industries are chronically more profitable than other industriesb. some industries oscillate between being highly attractive and highly unattractive c. both of the above d. none of these7. In an unrelated diversified firm, situations which negatively affect one business likelypositively affect the firm’s other businesses.a. true b. false8. The boundaries of an industry allow us identify…a. industry rivals b. industry substitutes c. both of thesed. none of these9. The aggregate capacity of an industry can be well estimated from the…a. observed aggregate demand of customers b. relative market share of rivalsc. both of the above d. none of the above 10. Assume we do a Porter analysis of the PC industry and determine the industry is currently unattractive. We then do a second analysis on the chip industry, which is a supplier to the PCindustry. Given the first analysis (on the PC industry), the second analysis will likely conclude that the chip industry is…a. more unattractive b. similarly unattractive c. more attractive d. insufficientinformation to tell11. In 2011-2012, many players entered the tablet market. From this we can infer that…a. entry barriers were low b. branding was important c. the tablet industry was attractive d. all of these12. Assume we learn the following about an industry: Entry is inexpensive, exit is expensive, there are no economies of scale, demand is shrinking, there is overcapacity, and existing customers are not brand loyal. Given just this information…a. the industry is probably unattractive b. most rivals in the industry are unprofitablec. the industry is probably in the growth phase d. all of these13. Assume we conduct a Porter type analysis and determined the industry of interest was veryunattractive. From this finding we can conclude that…a. barriers to entry are low b. switching costs are lowc. there is excess capacity d. none of the above14. Problems of the Porter model include…1a. little or no concern with industry dynamics b. not very good at analyzing newlydeveloping industriesc. both of the above d. none of the above15. A firm’s unique competitive advantages are dependent on…a. its resources b. its investment decisions c. both of these d. none ofthese16. Licensing is an agreement between the owner (firm X) of intellectual property and some otherfirm (firm Y) which allows firm Y to _________ firm X’s intellectual property.a. buy b. sell c. use d. extend17. Compared to focused firms, we would expect diversified firms to experience ______ agencyproblems.a. fewer b. about the same number c. more d. insufficient information todetermine18. An offering by one party to a transaction that can satisfy a need of the other party is called a _______ .a. product b. brand c. marketing channel d. merchandising strategy19. Assume A and B are head-to-head rivals. Also assume both earn excess rent. Given just this information our best guess is that both firms are competing in… BAD QUESTIONa. a perfect competition b. an oligopoly c. a monopolistic competition d. monopoly20. Which of the following affects the firm’s marketing mix?a. product extension b. price c. promotion d. all of these21. Consumer Reports describes itself as “the world’s largest independent consumer-product testing organization.” In a recent issue, it identified the Samsung PN43E450 TV as a “Best Buy.” Most probably “Best Buy” means…a. lowest price b. highest overall quality c. best value d. none of these22. The incentive to product differentiate is that most products introduced by first movers succeed. a. true b. false23. A few years ago Jet Blue was in the news due to their stranding of a large number ofpassengers on the runway at JFK during bad weather. This situation probably…a. caused a reduction in the firm’s brand loyaltyb. caused a reduction in the firm’s brand equityc. both of the above d. none of the above 24. In practice, buyers usually search most or all alternatives before… BAD QUESTION (due toitem b)a. making a purchase decision b. making a transfer transactionc. both of the above d. none of the above24. Many years ago, original Coca-Cola was replaced by “New Coke.” This is an example of…a. product refinement b. product extension c. diversification d. all of these DELETED25. Since niche markets tend to be narrow segments…a. they are unlikely to be profitable b. they are difficult to defendc. both of the above d. none of the above 26. The trigger for slow second