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| Section | Objectives |
|---|---|
| Global Economics | - Exchange rates and currency systems - Global economic institutions and trade policy - International trade and comparative advantage |
| Microeconomics for Managers | - Elasticity and pricing decisions - Market structures and competition - Supply and demand analysis |
| Macroeconomic Environment | - Fiscal and monetary policy - GDP, inflation, and unemployment |
| Managerial Economic Decision-Making | - Risk and uncertainty in global markets - Cost-benefit analysis in business contexts |
| Foundations of Economics | - Scarcity, opportunity cost, and economic reasoning - Market systems and economic models |
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NEW QUESTION # 24
In an oligopoly with an initial agreement to maximize total profit, which statements might a firm motivated by self-interest likely make? (Choose THREE.)
Answer: A,C,D
Explanation:
InGlobal Economics for Managers, oligopolies often face aprisoner's dilemma, making deviation from collusive agreements individually rational. Options A, B, and C correctly reflect this logic.
If others cooperate, cheating by increasing output raises individual profit. If others cheat, matching their behavior minimizes losses. Therefore, regardless of others' actions, raising output appears optimal.
Options D and E contradict self-interested incentives.
Thus, A, B, and C correctly capture oligopolistic behavior.
NEW QUESTION # 25
What are common types of barriers to entry that can cause a monopoly? (Choose TWO.)
Answer: C,F
Explanation:
InGlobal Economics for Managers, monopolies arise whenbarriers to entryprevent potential competitors from entering a market. Two common barriers areeconomies of scaleandgovernment-granted exclusive rights, making options B and E correct.
Economies of scaleoccur when average costs decline as output increases. In industries with very high fixed costs, a single large firm can produce at a lower cost than multiple smaller firms. This discourages entry because new firms cannot compete efficiently at small scales, leading to monopoly outcomes.
Government regulations granting exclusive production rights-such as patents, licenses, or exclusive franchises-also create monopolies by legally preventing competition. These barriers are intentional and often justified to encourage innovation or ensure service provision.
Option A does not restrict entry. Option C may limit foreign competition but does not necessarily create a monopoly. Option D does not prevent entry. Option F may increase market concentration but is not a structural entry barrier itself.
Thus, options B and E are correct.
NEW QUESTION # 26
In which situation is the dodger strategy appropriate for responding to multinational enterprises (MNEs)?
Answer: C
Explanation:
InGlobal Economics for Managers, thedodger strategyis appropriate whenindustry pressure to globalize is low and a firm's competitive assets are customized to its home market, making option D correct.
Under this strategy, firms avoid direct confrontation with multinational enterprises by focusing on niche markets, specialized products, or protected domestic segments. Since globalization pressure is weak, firms are not forced to expand internationally, and their localized assets give them an advantage at home.
Dodgers may also cooperate selectively with MNEs or operate in areas where global competition is limited.
This strategy minimizes risk and preserves firm-specific advantages without costly global expansion.
Options A and B align with extender strategies. Option C aligns with contender strategies.
Thus, option D correctly identifies when the dodger strategy is appropriate.
NEW QUESTION # 27
When supply increases and demand stays the same, what happens to the equilibrium point of price and quantity?
Answer: D
Explanation:
InGlobal Economics for Managers, an increase in supply with demand held constant leads to anew equilibrium characterized by a lower price and a higher quantity, making option A-quantity increases- the correct answer. This outcome follows directly from standard supply-and-demand analysis.
When supply increases, the supply curve shifts to the right. At the original equilibrium price, producers are now willing and able to supply more than consumers wish to buy, creating excess supply. To eliminate this surplus, sellers reduce prices. As prices fall, quantity demanded increases until a new equilibrium is reached where quantity supplied equals quantity demanded.
Although price also changes (it falls), the question asks what happens to theequilibrium point of price and quantity, and among the given options, onlyquantity increasesis correct. Price does not remain the same, nor does it increase, and quantity certainly does not decrease.
This concept is critical for managers analyzing productivity improvements, technological progress, or reductions in input costs. Supply increases are often driven by innovation, economies of scale, or favorable regulatory changes, all of which allow firms to produce more at every price.
Thus, option A correctly describes the equilibrium outcome when supply increases and demand remains unchanged.
NEW QUESTION # 28
What is a characteristic of common law as compared to civil law?
Answer: C
Explanation:
InGlobal Economics for Managers,common lawsystems are distinguished by their heavy reliance onjudicial precedents, making option B correct. Under common law, judges interpret and apply the law by referring to outcomes of prior court cases. These precedents guide future rulings and allow the legal system to evolve incrementally over time.
This contrasts withcivil lawsystems, which emphasize comprehensive legal codes and statutes enacted by legislatures. In civil law countries, judges apply written laws more strictly and have less discretion to create legal interpretations based on prior cases.
For managers, the distinction matters because common law systems often provide greater flexibility and adaptability but may also involve higher legal uncertainty and litigation costs. Civil law systems offer clearer rules but less flexibility.
Thus, option B correctly identifies a defining characteristic of common law.
NEW QUESTION # 29
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