Governance mechanisms are designed
a. to increase contracting costs
b. to resolve post-contractual opportunism
c. to enhance the flexibility of restrictive covenants
d. to replace insurance
e. none of the above
QUESTION 2Potential solutions to sell a high-quality used car include
a. offering a warranty
b. selling through a reputable dealer
c. documenting the complete repair history
d. all of the above
QUESTION 3A demand curve will shift out for any of the following reasons except that:
a. preference for a good increases.
b. price of a substitute falls.
c. income rises.
d. price of a complement falls.
QUESTION 4Reliant assets are always all of the following except:
a. durable
b. have substantially less value in second best use
c. dependent on unique complementary inputs
d. pivotal in designing strategy
QUESTION 5The lemons problem is that
a. cars of verifiable high quality are withheld from the used car market
b. cars of verifiable low quality are withheld from the used car market
c. cars of unverifiable high quality are withheld from the used car market
d. cars of unverifiable low quality are withheld from the used car market
QUESTION 6The short-run market supply curve is:
a. the horizontal summation of each firm's short-run supply curve.
b. the vertical summation of each firm's short-run supply curve.
c. the horizontal summation of each firm's short-run average cost curve.
d. the vertical summation of each firm's short-run average cost curve.
QUESTION 7Mac trucks and their dealers would likely have an organizational form of
a. fixed profit sharing franchise contracts
b. spot market recontracting
c. alliances
d. vertical integration
QUESTION 8Which firm is not dealing with adverse selection
a. a manufacturer requires a 90 day probationary period for new employees
b. a temporary clerical agency requires a typing test
c. a manufacturer requires suppliers to be ISO 900 . certified
d. Smokers get the same life insurance rates as non-smokers
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