BUSA 4900: Ch. 8 Quiz

A(n) ________ is best used to depict the transformation of raw materials into finished goods and services along distinct vertical stages.

Industry value chain

________ is best described as a situation in which one party is more informed than another, because of the possession of private information.

Information asymmetry

Which of the following alternatives on the make-or-buy continuum allows for most integration?

Parent-subsidiary relationship

Which of the following stakeholders of a company would most likely be responsible for formulating a corporate strategy?

The CEO

Decisions relating to "what stages of the industry value chain to participate in" determine a firm's...

vertical integration

________ is best described as a form of long-term contracting in the manufacturing sector that enables firms to commercialize intellectual property.

Licensing

Managers in a firm hired to improve the firm's profitability and ultimately the shareholders' value will add to the overall costs if they pursue their own self-interests. What does this best illustrate?

Principal-agent problem

Amazon.com has decided to enter the college bookstore market. The goal of "Amazon Campus" is to offer co-branded university-specific web sites that offer textbooks and paraphernalia, such as logo sweaters and baseball hats. This development shows Amazon's relentless pursuit of...

Product diversification

Which of the following statements is true of transaction costs?

Transaction costs are necessary to explain and predict the boundaries of a firm.

_________ is best described as a firm's ownership of its production of needed inputs or of the channels by which it distributes its outputs.

Vertical integration