A+ Answers of the following Questions

1. Adverse selection in bargaining comes from:
lying to one party or another. 
principals in the bargaining process.
agents in the bargaining process.
asymmetric information held by the principal or agent.

2. In a small number environment,_________ is a useful managerial tool for considering rivals (competitors) responses to decision-making
game theory.
competitive market theory
risk sharing theory
intra-firm strategy.

1. If consumers find that there are substantial transactions cost to purchasing a product, then:
overall consumer demand is greater at each price
overall consumer demand is the same at each price
overall consumer demand is less at each price
equilibrium price and quantity both fall

2. Game theory between two firms with two outcomes tends to emphasizes:
non cooperative games
cooperative games
intra-firms decision-making
purely competitive outcomes

3. The learning effect is one form of:
diversification
creating value through increasing transaction costs.
creating value through stabilizing transactions costs.
creating value through decreasing transactions costs.

1. Complete this sentence: The long term chance of occurrence, or relative frequency of loss, is defined to be
a. Risk
b. Peril
c. Chance of loss
d. Hazard

2. There are two main categories of risk measurement techniques. They are _________ and ____________ (fill in the blanks)

3. When a group of experts are asked to make independent predictions on a risk, with extremes discarded is called brainstorming
a. True
b. False

1. The fast food industry fro Back Yard Burgers to KFC promises good food delivered quickly. The value of the consumer's time:
is less important than productions costs.
is a key component in creating value for the firm and the consumer.
is usually so low that fast food is unimportant in the marketplace.
must be discounted to make sure it is negative.

2. Dell Computer attempts to collect information about customers before purchase and assemble customized product for the customer. This process tries to:
reduce transactions costs for both Dell and te customer.
reduce transactions cost for the customer only.
increase transactions cost for Dell so that it can reduce taxable profits.
increase tansactions costs for customers so that IBM can sell send PSs lso.

1. The following are methods of Risk Response except:
a. Duplication
b. Avoidance
c. Transfer
d. Assessment

2. All of the following are examples of organizational risk except:
a. Legal
b. Financial
c. Economic
d. Political

3. The following are examples of the cost of risk except;
a. Cost of unreimbursed losses
b. Outlays to reduce risks
c. Taxes paid on salaries
d. Opportunity cost of projects forgone because of risk considerations.