Final Exam

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User| Samantha Capasso |
Course| Managerial Economics & Globali |
Test| Final Exam |
Started| 9/14/12 7:22 PM |
Submitted| 9/14/12 8:45 PM |
Status| Completed |
Score| 260 out of 300 points |
Time Elapsed| 1 hour, 22 minutes out of 2 hours. |
Instructions| This final exam consist of 30 multiple choice questions and covers the material in chapters 8 through 17. There are three questions from each chapter and the questions are in chapter order. Be sure you are in the correct Chapter when you take the exam.|

* Question 1
10 out of 10 points
| |
| Which of the following factors affect vertical integration of firms?Answer| | | | | Selected Answer:| The transaction cost at each stage of production.|
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* Question 2
10 out of 10 points
| |
| In order to be successful as an innovator, a firm may require:Answer| | | | | Selected Answer:| research facilities and a culture that respects scientists and engineers.|
| | | |
* Question 3
0 out of 10 points
| |
| Which of the following contracts contain vertical restrictions that limit the transacting parties’ choices but create economic value?Answer| | | | | Selected Answer:| A contract amongst competitive firms on an uniform pricing strategy.|

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* Question 4
10 out of 10 points
| |
| According to economists, an individual who tries to derive utility from the consumption of a good without paying for it is called:Answer| | | | | Selected Answer:| a free rider.|
| | | |
* Question 5
10 out of 10 points
| |
| According to Coasian reasoning, if negotiation is costless:Answer| | | | | Selected Answer:| irrespective of the initial distribution of rights, the efficient outcome will maximize the net benefit of the group.|

| | | |
* Question 6
0 out of 10 points
| |
| Investments that are specific to a relationship (i.e. of lower value elsewhere) are considered risky and require:Answer| | | | | Selected Answer:| high rates of return.|
| | | |
* Question 7
10 out of 10 points
| |
| Which of the following is a legal remedy for a breach of the contract between parties?Answer| | | | | Selected Answer:| Liquidated damages|
| | | |
* Question 8
10 out of 10 points
| |
| Which of the following examples can be associated with the task specificity aspect of an asset?Answer| | | | | Selected Answer:| Purchasing machines which can be used to produce only a particular product.|

| | | |
* Question 9
10 out of 10 points
| |
| Which of the following contracts is considered self-enforcing?Answer| | | | | Selected Answer:| A futures contract purchased through a NYSE broker.|
| | | |
* Question 10
10 out of 10 points
| |
| Which of the following theories states that people who are highly risk-averse are less likely to engage in high-risk activities?Answer| | | | | Selected Answer:| The propitious selection theory|

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* Question 11
10 out of 10 points
| |
| DTC contracts which prohibit buyers from inspecting diamonds in advance help to minimize:Answer| | | | | Selected Answer:| the cost of gathering duplicative information.|
| | | |
* Question 12
10 out of 10 points
| |
| Which of the following situations can lead to a winner’s curse?Answer| | | | | Selected Answer:| An overoptimistic bid which helps the bidder to win but fails to cover his costs.|
| | | |
* Question 13
10 out of 10 points
| |
| A person acting as a supervisor as well as a residual claimant:Answer| | | | | Selected Answer:| attempts to make value-maximizing investment decisions.|
| | | |
* Question 14
10 out of 10 points
| |
| _____ is a property which distinguishes corporations from proprietorships and partnerships.Answer| | | | |...
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