Economic Theories Quiz

What does Standard Economic Theory assume about competition?

• Many buyers and sellers with homogeneous goods.

• Only a few sellers dominate the market.

• Prices are fixed and do not change.

• All firms have equal market power.

What is Adverse Selection in Information Theory?

• When one party has more information than the other.

• When both parties have equal information.

• When information is shared equally.

• When contracts are perfectly clear.

What is the Nash Equilibrium in Game Theory?

• A situation where no player can improve their payoff.

• A situation where all players cooperate.

• A situation where one player dominates the game.

• A situation where players can change strategies freely.

What are Agency Costs?

• Costs arising from the agent's goals differing from the principal's.

• Costs incurred by the principal to monitor the agent.

• Costs related to hiring unqualified agents.

• All of the above.

What does the Behavioral Theory of the Firm emphasize?

• Profit maximization.

• Real-world decision-making within firms.

• Perfect competition.

• Rational decision-making.

What are Transaction Costs?

• Costs of coordinating economic activity.

• Costs of producing goods.

• Costs of marketing products.

• Costs of hiring employees.

What is the concept of Variation in Evolutionary Approaches?

• Developing new routines or strategies.

• Selecting successful firms.

• Retaining successful strategies.

• None of the above.

What is the focus of Business Strategy?

• How firms compete.

• How firms manage their resources.

• How firms diversify.

• How firms innovate.

What is the difference between exploitation and exploration in Organizational Learning Theory?

• Using existing knowledge vs. seeking new knowledge.

• Correcting errors vs. ignoring them.

• Learning from mistakes vs. repeating them.

• None of the above.

What is the primary focus of the Resource-Based View in strategic management?

• External market conditions.

• Government regulations.

• Market competition.

• Internal resources and capabilities.