Question 1

When consumers learn about one seller at a time it is known as a :

Accepted Answer

A) Simultaneous search 
B) Parallel search 
C) Serial search 
D) Sequential search 
E) Divided search 
A) Simultaneous search 
B) Parallel search 
C) Serial search 
D) Sequential search 
E) Divided search D

Question 2

Motivation bias and survivor bias are most common in which of the following?

Accepted Answer

A) Input based scorecards 
B) Process based scorecards 
C) Scorecards on horizontally differentiated products 
D) Scorecards on vertically differentiated products 
E) Low cost products 
A) Input based scorecards 
B) Process based scorecards 
C) Scorecards on horizontally differentiated products 
D) Scorecards on vertically differentiated products 
E) Low cost products C

Question 3

Unraveling is an economic theory that describes which of the following?

Accepted Answer

A) Low quality products will be quickly discovered and abandoned by buyers 
B) High seller concentration leads to the development of many substitute products 
C) Few sellers improve product quality once they have scale in production 
D) Even low quality sellers will disclose their product quality 
E) Consumers ultimately switch products regardless of quality 
A) Low quality products will be quickly discovered and abandoned by buyers 
B) High seller concentration leads to the development of many substitute products 
C) Few sellers improve product quality once they have scale in production 
D) Even low quality sellers will disclose their product quality 
E) Consumers ultimately switch products regardless of quality D

Question 4

Which of the following best describes the consumer's shopping problem?

Accepted Answer

A) Having enough money to purchase all necessary goods and services 
B) Finding the seller that offers the highest value of B - P 
C) Determining the quality of products 
D) Locating sellers that provide the required products 
E) Selecting between brand products and non-brand products. 
A) Having enough money to purchase all necessary goods and services 
B) Finding the seller that offers the highest value of B - P 
C) Determining the quality of products 
D) Locating sellers that provide the required products 
E) Selecting between brand products and non-brand products.

Question 5

Products for which consumers can easily obtain the information required to compare alternatives are called:

Accepted Answer

A) Experience goods 
B) Search goods 
C) Retail goods 
D) Consumer goods 
E) Credence Goods 
A) Experience goods 
B) Search goods 
C) Retail goods 
D) Consumer goods 
E) Credence Goods

Question 6

What is a firm providing when it is informing customers about a product's benefits?

Accepted Answer

A) Advertising 
B) Certification 
C) Distributing 
D) Notice 
E) Disclosure 
A) Advertising 
B) Certification 
C) Distributing 
D) Notice 
E) Disclosure

Question 7

Why do consumers tend to gravitate towards non-profit firms when evaluating credence goods?

Accepted Answer

A) Consumers like giving to charities 
B) Non-profit firms charge lower prices 
C) Consumers can deduct some or all of the purchase price for tax purposes 
D) Non-profit firms offer goods and services not offered by for profit firms 
E) Consumers believe non-profit sllers will be less likely to skimp on quality for profit. 
A) Consumers like giving to charities 
B) Non-profit firms charge lower prices 
C) Consumers can deduct some or all of the purchase price for tax purposes 
D) Non-profit firms offer goods and services not offered by for profit firms 
E) Consumers believe non-profit sllers will be less likely to skimp on quality for profit.

Question 8

Why do consumers often rely on friend's advice when shopping for experience goods?

Accepted Answer

A) They know their friend's tastes 
B) Friends are less likely to be biased reporters 
C) There are no search costs in seeking friend's advice 
D) Friends are always more accurate than unknown verifiers 
E) All friends share the common goal of highest quality 
A) They know their friend's tastes 
B) Friends are less likely to be biased reporters 
C) There are no search costs in seeking friend's advice 
D) Friends are always more accurate than unknown verifiers 
E) All friends share the common goal of highest quality

Question 9

When consumers learn about many products at once,it is known as a:

Accepted Answer

A) Simultaneous search 
B) Parallel search 
C) Serial search 
D) Sequential search 
E) Divided search 
A) Simultaneous search 
B) Parallel search 
C) Serial search 
D) Sequential search 
E) Divided search

Question 10

Which of the following would not reduce gaming of report cards?

Accepted Answer

A) Reporting scores using simple graphics 
B) Using simple composite scores 
C) Making firms pay for report card results 
D) Measure quality at the most aggregate level 
E) Risk adjust report card scores 
A) Reporting scores using simple graphics 
B) Using simple composite scores 
C) Making firms pay for report card results 
D) Measure quality at the most aggregate level 
E) Risk adjust report card scores

Question 11

Which of the following terms describes when firms with high scores tend to have more than their share of luck in rankings?

Accepted Answer

A) Measurement bias 
B) Process error 
C) Mean regression 
D) Multitasking 
E) Mean reversion 
A) Measurement bias 
B) Process error 
C) Mean regression 
D) Multitasking 
E) Mean reversion

Question 12

Conflicts of interest in the certifier market often can lead to which of the following?

Accepted Answer

A) Higher priced goods and services 
B) Lower competition between substitute goods 
C) A reduction in the number of competitive sellers 
D) Certification bias 
E) Less product choice for the consumer 
A) Higher priced goods and services 
B) Lower competition between substitute goods 
C) A reduction in the number of competitive sellers 
D) Certification bias 
E) Less product choice for the consumer

Question 13

High quality certification in horizontally differentiated goods is aided by which of the following?

Accepted Answer

A) Outcome based scorecards 
B) Internet firms like Google and Yahoo 
C) Risk adjustment 
D) Mean reversion 
E) Firms paying for more scorecards 
A) Outcome based scorecards 
B) Internet firms like Google and Yahoo 
C) Risk adjustment 
D) Mean reversion 
E) Firms paying for more scorecards

Question 14

Which of the following is a grade used to evaluate quality?

Accepted Answer

A) Report card 
B) Status report 
C) Verification 
D) Warrantee claim 
E) Product statement 
A) Report card 
B) Status report 
C) Verification 
D) Warrantee claim 
E) Product statement

Question 15

Which of the following is measured by a report card that assesses the components of a product?

Accepted Answer

A) Process 
B) Inputs 
C) Warrantees 
D) Outcomes 
E) Longevity 
A) Process 
B) Inputs 
C) Warrantees 
D) Outcomes 
E) Longevity

Question 16

Which of the following is a source for horizontal differentiation?

Accepted Answer

A) Price 
B) Quality 
C) Advertising 
D) Location 
E) Availability of substitutes 
A) Price 
B) Quality 
C) Advertising 
D) Location 
E) Availability of substitutes

Question 17

What term best describes a firm informing customers about a product's benefits?

Accepted Answer

A) Advertising 
B) Certification 
C) Disclosure 
D) Notice 
E) Broadcasting 
A) Advertising 
B) Certification 
C) Disclosure 
D) Notice 
E) Broadcasting

Question 18

When is a signal informative?

Accepted Answer

A) When it is lightly advertised by the firm 
B) When it is more profitable for the high quality firm to offer it 
C) When there are many firms advertising substitute products 
D) When it is offered by the low quality firm 
E) When the first firm that signals is the low quality firm 
A) When it is lightly advertised by the firm 
B) When it is more profitable for the high quality firm to offer it 
C) When there are many firms advertising substitute products 
D) When it is offered by the low quality firm 
E) When the first firm that signals is the low quality firm

Question 19

Why is advertising an effective signal of quality in an experience good?

Accepted Answer

A) Consumers are uninformed and need advertising to provide information 
B) Advertising lists the qualities of a product 
C) Consumers believe firms that can afford to heavily advertise sell quality products 
D) Sellers can ignore low quality issues in their advertisements 
E) Consumers believe advertising more than word of mouth information 
A) Consumers are uninformed and need advertising to provide information 
B) Advertising lists the qualities of a product 
C) Consumers believe firms that can afford to heavily advertise sell quality products 
D) Sellers can ignore low quality issues in their advertisements 
E) Consumers believe advertising more than word of mouth information

Question 20

Evaluating product quality can be accomplished by the use of which of the following?

Accepted Answer

A) Status Reports 
B) Matchmakers 
C) Verification 
D) Report cards 
E) None of the above 
A) Status Reports 
B) Matchmakers 
C) Verification 
D) Report cards 
E) None of the above

When consumers learn about one seller at a time it is known as a :

Motivation bias and survivor bias are most common in which of the following?

Unraveling is an economic theory that describes which of the following?

Which of the following best describes the consumer's shopping problem?

Products for which consumers can easily obtain the information required to compare alternatives are called:

What is a firm providing when it is informing customers about a product's benefits?

Why do consumers tend to gravitate towards non-profit firms when evaluating credence goods?

Why do consumers often rely on friend's advice when shopping for experience goods?

When consumers learn about many products at once,it is known as a:

Which of the following would not reduce gaming of report cards?

Which of the following terms describes when firms with high scores tend to have more than their share of luck in rankings?

Conflicts of interest in the certifier market often can lead to which of the following?

High quality certification in horizontally differentiated goods is aided by which of the following?

Which of the following is a grade used to evaluate quality?

Which of the following is measured by a report card that assesses the components of a product?

Which of the following is a source for horizontal differentiation?

What term best describes a firm informing customers about a product's benefits?

When is a signal informative?

Why is advertising an effective signal of quality in an experience good?

Evaluating product quality can be accomplished by the use of which of the following?

The Power of Principles: A Historical Perspective

The Horizontal Boundaries of the Firm

The Vertical Boundaries of the Firm

Integration and Its Alternatives

Competitors and Competition

Entry and Exit

The Dynamics Competing Across Time

Industry Analysis

Strategic Positioning for Competitive Advantage

Sustaining Competitive Advantage

Performance Measurement and Incentives

Strategy and Structure

Environment, Power, and Culture

Economics Primer

Filters

Exam 10: Information and Value Creation

When consumers learn about one seller at a time it is known as a :

Motivation bias and survivor bias are most common in which of the following?

Unraveling is an economic theory that describes which of the following?

Which of the following best describes the consumer's shopping problem?

Products for which consumers can easily obtain the information required to compare alternatives are called:

What is a firm providing when it is informing customers about a product's benefits?

Why do consumers tend to gravitate towards non-profit firms when evaluating credence goods?

Why do consumers often rely on friend's advice when shopping for experience goods?

When consumers learn about many products at once,it is known as a:

Which of the following would not reduce gaming of report cards?

Which of the following terms describes when firms with high scores tend to have more than their share of luck in rankings?

Conflicts of interest in the certifier market often can lead to which of the following?

High quality certification in horizontally differentiated goods is aided by which of the following?

Which of the following is a grade used to evaluate quality?

Which of the following is measured by a report card that assesses the components of a product?

Which of the following is a source for horizontal differentiation?

What term best describes a firm informing customers about a product's benefits?

When is a signal informative?

Why is advertising an effective signal of quality in an experience good?

Evaluating product quality can be accomplished by the use of which of the following?

The Power of Principles: A Historical Perspective

The Horizontal Boundaries of the Firm

The Vertical Boundaries of the Firm

Integration and Its Alternatives

Competitors and Competition

Entry and Exit

The Dynamics Competing Across Time

Industry Analysis

Strategic Positioning for Competitive Advantage

Sustaining Competitive Advantage

Performance Measurement and Incentives

Strategy and Structure

Environment, Power, and Culture

Economics Primer

Filters