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A firm incurs $100 to manufacture an office table.It fixes the market price of the table as $250, and discounts the price to $200.However, the maximum a person is willing to pay for it is $180.What is the amount of total perceived consumer benefits in this scenario?


A) $250
B) $200
C) $180
D) $100

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In the _____ business model, the initial product is often sold at a loss or given away for free in order to drive demand for complementary goods.


A) subscription-based
B) razor-razor-blade
C) pay-as-you-go
D) direct sales

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Which of the following expressions accurately describes market cap?


A) It is the product of the number of outstanding shares and the share price.
B) It is the difference between the book value and the market value of a firm's assets.
C) It is the ratio of a firm's equity finance and its debt finance.
D) It is the difference between a firm's account receivables and account payables.

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Which of the following statements is true of the triple bottom line?


A) It is more or less a one-dimensional metric of measuring competitive advantage of a firm.
B) Its primary focus is to base a firm's strategic goals entirely on external performance dimensions.
C) According to this approach, achieving positive results in any one of the dimensions, economic, social, and ecological, can lead to a sustainable strategy.
D) Three dimensions, economic, social, and ecological, make up the triple bottom line.

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List the dimensions on which a firm can create greater economic value.

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A firm's advantage can be based on super...

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Define crowdsourcing.

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Crowdsourcing is a process in ...

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The difference between the price charged for a product and the cost to manufacture it is referred to as the _____.


A) consumer surplus
B) break-even price
C) producer surplus
D) reservation price

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Discuss the four key questions managers need to answer when using the balanced scorecard to develop strategic objectives.

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The four key questions are:
1.How do cus...

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Competitive advantage goes to the firm that achieves the largest economic value created.Elaborate on this statement.

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Competitive advantage goes to the firm t...

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What are the disadvantages of the balanced scorecard?

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Though widely implemented by many busine...

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A defining characteristic of the pay-as-you-go business model is that the:


A) users pay for only the services they consume.
B) users pay for access to a product or service whether they use it during the payment term or not.
C) initial product is often sold at a loss in order to drive demand for complementary goods.
D) the basic features of a service are provided free of charge, but the user must pay for premium services.

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Maverick Communications Inc.is a cellular service provider that charges its customers $1 for three hours of talk time.So, if a customer's talk time for a month is 60 hours, the company charges him or her $20 at the end of the month.Which of the following business models does this best illustrate?


A) Razor-razor-blade
B) Subscription-based
C) Pay-as-you-go
D) Freemium

Correct Answer

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Which of the following is NOT an accurate expression of the economic value created per unit of a product sold?


A) The sum of consumer surplus and producer surplus
B) The difference between consumer's reservation price and firm's cost
C) The sum of consumer surplus and firm profit
D) The difference between the price charged and the firm's cost

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By selling a laptop at $1000 for which consumers are willing to pay up to $1200, a consumer electronics firm makes a profit of $400 per unit.In this scenario, the amount $600, that is ($1200 - $1000) + $400, is the _____.


A) opportunity cost
B) economic value created
C) reservation price
D) consumer surplus

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Janet is a 23-year-old employee at DR Products Inc.As a millennial, she will tend to:


A) view superior financial performance as the sole objective of her firm.
B) expect her company to be socially responsible.
C) be much more like Generation Xers than Baby Boomers.
D) work for companies with values that are contradictory to her own values.

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The top management at BioTrue Pharma Inc.through rigorous testing ensures that the company develops and sells drugs that are free of harmful side-effects.Also, the company ensures that the chemical waste generated in the manufacturing process is kept to a bare minimum and is disposed of according to the regulations of the Environmental Protection Agency.The management assesses its overall performance based on these dimensions.Thus, the managers at Bio True Pharma are applying the _____ approach to measure firm performance.


A) economic value creation
B) shareholder value creation
C) triple bottom line
D) accounting profitability

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Which of the following statements is true of accounting data?


A) Accounting data focus mainly on intangible assets, rather than tangible assets.
B) Accounting data are historical data and thus backward-looking.
C) Accounting data do not have to be adjusted in any manner to compare companies with different capital structures.
D) Accounting data consider off-balance sheet items, such as pension obligations of a firm.

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Threadless is a community-centered online apparel store that leverages user-generated content.The idea is to turn consumers into prosumers, a hybrid between producers and consumers.Members of the Threadless community do most of the work, which they consider fun: They submit T-shirt designs online, and community members vote on which designs they like best.The designs receiving the most votes are put in production, printed, and sold online.It can be said that Threadless uses the _____ technique.


A) offshoring
B) product diversification
C) crowdsourcing
D) horizontal integration

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What can be inferred from a firm's Research & development (R&D)/Revenue ratio?

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The ratio R&D/Revenue indicates how much...

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Describe the pay-as-you go business model.

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In the pay-as-you-go business model, the...

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