Alex's production is worth 60, Harry's is worth 40, Rob's is worth 40, and Julia's is worth 55 . They decide to combine their resources and produce together. For this to be a superadditive game, which of the following conditions must hold?
a. They should be able to produce more in groups of two than what they can produce together.
b. Their combined production must exceed the total they can individually produce.
c. Their resources must be perfect substitutes.
d. Their resources must be perfect complements.
QUESTION 2The supply chain refers to
A) the supply curve.
B) the process of outsourcing.
C) the process of downsizing.
D) the process of creating and selling a product.
QUESTION 3A characteristic function is:
a. one that identifies negotiations which depend on the characteristics of the bargainers.
b. one that gives the value each possible coalition of a group's members can create by operating independently.
c. one that identifies the most beneficial price for the buyer involved in a transaction.
d. one that identifies the most beneficial price for the seller involved in a transaction.
QUESTION 4Retail is
A) downstream.
B) upstream.
C) is reversed extraction.
D) impossible to outsource.
QUESTION 5An advantage of settling disputes via arbitration rather than court cases is that:
a. the risk of an incorrect decision in the former case is negligible.
b. the former is inexpensive and binding.
c. the former is more likely to grant a lenient decision.
d. the former may be more knowledgeable than an uninformed jury.
QUESTION 6If services are purchased from others that were once performed internally, then a firm has
A) downsized.
B) outsourced.
C) reduced the economies of scope.
D) experienced diseconomies of scale.
QUESTION 7Identify the correct statement about repeated negotiations from the following.
a. Patterns in repeated negotiations can persist over time but are usually region-specific.
b. The payoff from repeated negotiations is higher than that from negotiations which are unlikely to be repeated.
c. Experience can help the parties understand each other's positions when negotiations involve previously unencountered issues.
d. The greater the experience of the buyer the higher the benefits he realizes from a repeated negotiation.
QUESTION 8When a firm divests itself of an unrelated business to focus on it core competency, the firm is
A) using economies of scope to cut costs.
B) downsizing.
C) outsourcing.
D) market sharing.
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