WPC 480 EXAM QUESTIONS AND ANSWERS
LATEST UPDATE (ALREADY GRADED A+)
Which of the following is an example of internal transaction costs?
the costs pertaining to setting up a shop floor
True or False: The threat of opportunism is the least when a party to an exchange has made
transaction-specific investments.
FALSE
True or False: Flexibility is most valuable when the decision-making setting faced by a firm is
uncertain.
TRUE
True or False: When the economic value creation involved with a given transaction using the
organization (i.e., "make") is greater than the value creating of using the market (i.e., "buy"), an
organization should vertically integrate the opposing party/function.
True
True or False: When depending largely on an input that is valuable, rare, and costly to imitate, it is
optimal to carry out the exchange on the open market.
FALSE
Which of the following is an example of internal transaction costs?
the cost pertaining to setting up a shop floor
The rationale behind related diversification is to:
benefits from economies of scale and scope
An inverted U-shaped relationship between the type of diversification and overall firm performance
indicates that:
high and low levels of diversification are generally associated with the lower overall performance
Amazon expanded its single-product business by leveraging spare capacity into cloud computing and
by offering its Kindle line of tablet computers. This is an example of:
related linked diversification
Which of the following best illustrates a dominant-business firm?
Siova Inc. is a luxury brand that derives 90 percent of its revenues from its apparel line and 10 percent of
its revenues from its premium furniture business unit.
LATEST UPDATE (ALREADY GRADED A+)
Which of the following is an example of internal transaction costs?
the costs pertaining to setting up a shop floor
True or False: The threat of opportunism is the least when a party to an exchange has made
transaction-specific investments.
FALSE
True or False: Flexibility is most valuable when the decision-making setting faced by a firm is
uncertain.
TRUE
True or False: When the economic value creation involved with a given transaction using the
organization (i.e., "make") is greater than the value creating of using the market (i.e., "buy"), an
organization should vertically integrate the opposing party/function.
True
True or False: When depending largely on an input that is valuable, rare, and costly to imitate, it is
optimal to carry out the exchange on the open market.
FALSE
Which of the following is an example of internal transaction costs?
the cost pertaining to setting up a shop floor
The rationale behind related diversification is to:
benefits from economies of scale and scope
An inverted U-shaped relationship between the type of diversification and overall firm performance
indicates that:
high and low levels of diversification are generally associated with the lower overall performance
Amazon expanded its single-product business by leveraging spare capacity into cloud computing and
by offering its Kindle line of tablet computers. This is an example of:
related linked diversification
Which of the following best illustrates a dominant-business firm?
Siova Inc. is a luxury brand that derives 90 percent of its revenues from its apparel line and 10 percent of
its revenues from its premium furniture business unit.
