Economics 161 Review questions 1 Professor Tom K



Economics 308 Review Question 1 Professor Tom K. Lee

(There will be exam questions not from the review questions.)

Name & explain the 5 basic organizational architecture questions.

Name & explain the 5 basic managerial economics questions.

Name and explain the three implications of Economic Darwinism.

Name & explain the basic economic principles.

Define and explain specific knowledge and general knowledge.

State & explain the various forms of transaction costs.

Define a firm.

Name & explain the five reasons why firms exist.

State & explain separation of ownership & management.

State & explain the Principal Agent Problem.

State & explain the 7 sources of conflict between owners &

managers.

State & explain the conflict of shareholders and bondholders.

State and explain the conflict of large and small shareholders.

State & explain the 4 costs of contracts.

State and explain the 2 pre-contract information problems and their

solutions.

State & explain the 4 post contract problems and their solutions.

When will reputation concerns in implicit contracts more likely

to be effective?

Name and explain the 3 important aspects of organizational

architecture of a firm.

What is the primary goal of an economic organization?

Name & explain the three costs of changing organizational

architecture.

Define & explain corporate culture.

Name & explain the 2 dimensions of a job.

When are decisions made at the top?

When are decisions decentralized?

Name & explain the 5 benefits of decision decentralization.

Name & explain the 2 situations where decision decentralization

works best.

Name & explain the 3 costs of decision decentralization.

Why middle management is reducing in size and what is the new role

of middle management ?

What are the 4 reasons for firms to form teams?

What are the 2 benefits (costs) of team decision-making?

Name & explain the 2 determinants of team size.

Name & explain the 4 steps of decision-making process.

State & explain the Hay System of job evaluation.

Name & explain the benefits & costs of specialized task assignment.

State & explain broad task assignment.

Name & explain the 4 structural forms of organization.

Name & explain the benefits & costs of U form organization.

Name & explain the benefits & costs of M form organization.

What is the profit maximizing labor choice of a competitive firm?

State & explain compensation wage differential.

Economics 308 Review Questions 2 Professor Tom K. Lee

Why different industries have different period of probation for new

hires?

Why some industries offer life-time employment while others don’t?

State & explain an internal labor market.

Name & explain the benefits & costs of an internal labor market.

State & explain efficiency wage.

Name & explain the 6 costs of contest & tournament among workers.

State & explain wage compression.

State & explain backloaded compensation.

State & explain the 2 costs of cafeteria plans of fringe benefits.

Name & explain the five examples of incentive compensation.

Name & explain the 3 factors that limit the use of ownership to

resolve incentive problems.

Contrast risk sharing versus incentive standpoint of employment

compensation.

Name & explain the 5 conditions where incentive compensation works

best.

State & explain Informativeness Principle.

State & explain the 3 benefits of group incentive plans.

State & explain Ratchet effect.

State & explain the 2 forms of opportunism.

State & explain relative performance evaluation.

Name & explain the 2 subjective performance evaluation methods.

Name & explain cost center, expense center, revenue center, profit

center & investment center of a corporation.

Name & explain the profit maximizing output choice conditions of a

competitive firm versus of a firm with market power.

Name & explain the 5 sources of market power.

Name & explain the 4 different degrees of price discrimination.

State & explain inverse demand elasticity rule.

Define & explain two-part tariff monopoly & all-or-nothing contract

monopoly.

State & explain peak load pricing.

State and explain dominant firm price leadership model.

Define and explain transfer pricing.

Define & explain downsizing, divestiture, spin-off, equity carve-

out, split-off and outsourcing.

State & explain supply chain management.

Contrast strategic alliance versus joint ventures.

Contrast nonprofit versus for-profit organizations.

Name & explain the 7 legal forms of for-profit organization.

Define corporate governance.

State & explain the 5 internal control mechanisms of a corporation.

Define a tender offer, a bear hug, a hostile takeover, a greenmail, a white knight and a poison pill.

Name & explain the 7 examples of poison pills.

Name & explain the 3 sources of organization capital.

Name & explain the 8 types of corporate capital.

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