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Multiple Choice
- Which of the following did not contribute to the high transaction related risks for U.S. potato sales in
1840?
a) Infrequency of transactions
b) Changing transaction partners
c) Lack of availability of sales and prices for comparable goods
d) Competition from European merchants
e) Geographic distance between buyers and sellers
Ans: d
Learning Objective: Describe the operation of U.S. business up to 1840
AACSB: Analytic
AICPA: Research
IMA: Strategic Planning
Heading: The World in 1840 – Doing Business in 1840
Level: Medium
- What was a key contribution to the dominance of the family-run small business in 1840?
a) Factories
b) Infrastructure
c) Raw Materials
d) Management
e) Laws
Ans: b
Learning Objective: Describe the operation of U.S. business up to 1840
AACSB: Analytic
AICPA: Research
IMA: Strategic Planning
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern Infrastructure
Level: Easy
3. Matchmakers between manufacturers and sellers are called:
a) Agents
b) Factors
c) Brokers
d) Merchants
(Economics of Strategy 7e David Dranove, David Besanko, Mark Shanley, Mark Schaefer) (Test Bank all Chapters) 1 / 4
e) None of the Above
Ans: c
Learning Objective: Describe the modern infrastructure of U.S. business today
AACSB: Communication
AICPA: Interaction
IMA: Corporate Finance
Heading: Doing Business in 1840
Level: Easy
- What significant transportation event brought about the first significant growth of the Great Lakes
region?
a) Harnessing of the steam engine
b) Invention of the screw propeller
c) Opening of the Erie Canal
d) Integration of railway system
e) Invention of the railway system
Ans: c
Learning Objective: Describe the operation of U.S. business up to 1840
AACSB: Analytic
AICPA: Research
IMA: Strategic Planning
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern Infrastructure – Transportation
Level: Medium
- What is throughput?
a) The movement of inputs and outputs through a production process
b) Assets that assist in the production or distribution of goods and services
c) A condition that determines the horizontal and vertical boundaries of business firms
d) An investment in the acquisition of raw materials
e) The amount of time for a good to travel between metropolitan areas
Ans: a
Learning Objective: Explain the endurance of business principles and flexible strategies amid change
AACSB: Analytic
AICPA: Measurement
IMA: Quantitative Methods
Heading: Example 4.1 – The Emergence of Chicago
Level: Hard 2 / 4
- What mode of long-distance communication first laid the groundwork for today’s modern
communication forms?
a) U.S. Postal Service
b) Private mail service
c) Telegraph
d) Telephone
e) Railroad
Ans: d
Learning Objective: Explain the endurance of business principles and flexible strategies amid change
AACSB: Analytic
AICPA: Reflective Thinking
IMA: Global Business
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern Infrastructure – Communications
Level: Easy
- What was the major role of private banks in the early 1800s?
a) Serve as an institution for deposits
b) Issue credit
c) Reduce the risk of price fluctuation
d) Create futures markets
e) Sell stocks
Ans: b
Learning Objective: Describe the operation of U.S. business up to 1840
AACSB: Analytic
AICPA: Reflective Thinking
IMA: Business Applications
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern Infrastructure – Finance
Level: Medium
- What was one of the first plant/factory types to use the “American System” of manufacturing?
a) Firearms
b) Steel
c) Oil
d) Automobiles
e) Chemicals
- / 4
Ans: a
Learning Objective: Describe the operation of U.S. business up to 1840
AACSB: Technology
AICPA: Industry/Sector Perspective
IMA: Business Applications
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern Infrastructure – Production Technology
Level: Medium
- What economics game theory concept is demonstrated by the Erie Canal public works project?
a) Nash equilibrium
b) Lock-in
c) Backwards induction
d) Fair division
e) Prisoner’s dilemma
Ans: e
Learning Objective: Explain the endurance of business principles and flexible strategies amid change
AACSB: Reflective Thinking
AICPA: Decision Modeling
IMA: Business Economics
Heading: The World in 1840 – Conditions of Business in 1840: Life without a Modern Infrastructure - Government
Level: Easy
- What was the most significant development to the evolution of business circa 1910?
a) Railroad integration
b) Telegraph communication expansion
c) Banking and accounting standard practices
d) Mass-production technology
e) Advent of steam technology in railroads and shipping
Ans: d
Learning Objective: Explain the endurance of business principles and flexible strategies amid change
AACSB: Reflective Thinking
AICPA: Industry/Sector Perspective
IMA: business Applications
Heading: The World in 1910 – Doing Business in 1910
Level: Medium
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