Divisions of a University The separate colleges within universities are often operated as profit centers. While a student takes courses throughout the university, the budget of a specific dean is based on the students it serves. Two models are 1) basing funds on the number of student hours generated by a college and 2) basing funds on the number of students completing majors within the college. How do these two models affect the incentives for which courses included in the degree programs?
QUESTION 2Industries with high barriers to entry
a. Pushes profits to normal returns
b. increases the likelihood of firms entering the industry
c. help firms sustain profits
d. increases the number of competitors
QUESTION 3Marginal revenue product is defined as the amount that an additional unit of the variable input adds to ____.
a. marginal revenue
b. total output
c. total revenue
d. marginal product
e. none of the above
QUESTION 4Straight line pay for performance
a. Provides an incentive to increase performance
b. Breaks the link between meeting a particular budget target and compensation
c. Rewards the manager for doing more and punishes them for doing less
d. All of the above
QUESTION 5Typical structure characteristics of interest to Industrial Organization researchers include
a. Barriers to entry
b. Product differentiation among firms
c. The number and size distribution of firms
d. All of the above
QUESTION 6In production and cost analysis, the short run is the period of time in which one (or more) of the resources employed in the production process is fixed or incapable of being varied.
a. true b. false
QUESTION 7Straight line pay for performance
a. Eliminates the managers' incentives to lie about the budget
b. Eliminates the perverse incentive to hide information
c. Does not link compensation to meeting a budget target
d. All of the above
QUESTION 8Which of the following is true?
a. Industry structure determines firm conduct which in turn determines firms' performance
b. Industry structure determines firm performance which in turn determines firms' conduct
c. Industry conduct determines firm structure which in turn determines firms' performance
d. Industry performance determines firm conduct which in turn determines firms' structure
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