Term Best Describes Quiz Questions
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- 1.What term describes the situation where a firm does exceedingly well due to good luck or exceedingly poorly due to bad luck, but returns to normal performance following?
- A.
Regression to the mean
- B.
Competitive advantage
- C.
Persistent performer
- D.
Sustainable firm
- E.
Predictable performance
- 2.What Vonage do to deflect the impact of the intense price competition in the U.S.?
- A.
Attempted to position itself as the high-quality, high reliability player in the market
- B.
Raised its prices
- C.
Was acquired by Ebay
- D.
Began jointly providing service with cable companies
- E.
Replicate other firms on hardware and service features
- 3.Which of the following is least likely a characteristic of profit persistence in an industry?
- A.
Entry barrier exist
- B.
Economic profits should quickly converge to zero
- C.
Barriers to imitation exist
- D.
Firms earning above-average profits today should continue to do so in the future
- E.
Low profits firms today should remain low-profit firms in the future
- 4.Which of the following statements is least true with regards to Dennis Muller's study of profit persistence?
- A.
Muller's results suggests that firms with abnormally high levels of profitability tend, on average, to decrease in profitability over time
- B.
The profit rates of firms with abnormally high levels of profitability and firms with abnormally low levels of profitability will always converge to a common mean as the theory of perfect competition predicts
- C.
Muller's results suggests that firms with abnormally low levels of profitability tend, on average, to experiences increases in profitability over time
- D.
Firms that start out with high profits converge, in the long run, to rates of profitability that are higher than the rates of profitability of firms that starts out with low profits
- E.
Muller's work implies that market forces are a threat to profits, but only up to a point
- 5.What term best describes clusters of activities that a firm does especially well in comparison with other firms?
- A.
Competitive advantage
- B.
Resources
- C.
Capabilities
- D.
Threats to sustainability
- E.
Strategic firm assets
- 6.What term best describes firm-specific assets such as patents and trademarks, brand-name reputation, installed base, and organizational culture?
- A.
Competitive advantage
- B.
Capabilities
- C.
Resources
- D.
Threats to sustainability
- E.
Strategic firm assets
- 7.What term describes a framework used in strategy based on resource heterogeneity which posits that for a competitive advantage to be sustainable, it must be underpinned by resource capabilities that are scarce and imperfectly mobile?
- A.
Persistence of profitability for the firm
- B.
Capability-based theory of the firm
- C.
Regression of the mean
- D.
Resource-based theory of the firm
- E.
Five-forces framework
- 8.What term best describes a resource that cannot "sell itself" to the highest bidder?
- A.
Isolated
- B.
Value-creating
- C.
Scarce
- D.
Imperfectly mobile
- E.
Profit maximizing
- 9.What best describes the reason superstar athlets (resources) capture most of the extra-value they create for a firm in the form of higher salaries rather than the firm capturing the extra value itself?
- A.
The athletes are not value-creating
- B.
The athletes are isolating mechanisms
- C.
The athletes are not cospeccialized
- D.
The athletes are not scarce
- E.
The athletes are imperfectly mobile
- 10.What term best describes assets that are more valuable when used together than when separated?
- A.
Isolating
- B.
Value-creating
- C.
Imperfectly mobile
- D.
Scarce
- E.
Cospecialized
- 11.What term coined by Richard Rumlet refers to economic forces that limit the extent to which a competitive advantage can be duplicated or neutralized through resource-creation activities of other firms?
- A.
Capability-based theory of the firm
- B.
Resource-based theory of the firm
- C.
Early-mover advantages
- D.
Impediments to imitation
- E.
Isolating mechanisms
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