AVMG 4200 EXAM 1QUESTIONS AND ANSWERS
List and describe the three main forms of utility or value in a modern industrialized
economic system. - Answers :Possession: Value created in the hearts and minds of
individual consumers by the marketing function. Sometimes called "psychological" or
"perceived" value.
Form: Value created through the physical transformation of inputs into outputs by the
manufacturing or production/operations function.
Time/Place: Value created by the movement of product from areas of surplus (low
demand relative to supply) to areas of shortage (high demand relative to supply).
1. The value proposition is satisfied (Value is greater than or equal to cost)
2. "market conditions" exist: buyer and seller know about each other
3. Government does not prohibit movement
The "invisible hand" will increase the quality of life by the greatest amount for the
greatest number of people through the redistribution of goods from areas of surplus to
areas or shortage. - Answers :Under modern free market economic theory, list and
describe the conditions or circumstances that lead to the "invisible hand" phenomena.
What macroeconomic effect does the "invisible hand" have on the quality of life for
members of the economic system?
List and describe the macroeconomic factors that led to the explosion in international
trade at the end of World War II. - Answers :* Bretton Woods (resulted in GATT, which
led to WTO) agreement: Industrialized nations agreed to "make commerce, not war" by
liberalizing international trade. Goal was to eliminate all barriers to trade (tariffs, quotas,
etc.) making import/ export cheaper and easier.
*Transportation has become ubiquitous, easy, and cheap.
*Information has become ubiquitous, easy, and cheap.
Describe and discuss the two shared "top priorities" of regulators and industry
organizations. What effect did economic deregulation have on the competitive
environment faced by transportation service providers in terms of costing, pricing, and
profitability? - Answers :1. Protecting the travelling public
-
2. Facilitating economic activity
-
Economic deregulation helped improve the competitive environment. Competed based
on price.
List and describe the three main forms of utility or value in a modern industrialized
economic system. - Answers :Possession: Value created in the hearts and minds of
individual consumers by the marketing function. Sometimes called "psychological" or
"perceived" value.
Form: Value created through the physical transformation of inputs into outputs by the
manufacturing or production/operations function.
Time/Place: Value created by the movement of product from areas of surplus (low
demand relative to supply) to areas of shortage (high demand relative to supply).
1. The value proposition is satisfied (Value is greater than or equal to cost)
2. "market conditions" exist: buyer and seller know about each other
3. Government does not prohibit movement
The "invisible hand" will increase the quality of life by the greatest amount for the
greatest number of people through the redistribution of goods from areas of surplus to
areas or shortage. - Answers :Under modern free market economic theory, list and
describe the conditions or circumstances that lead to the "invisible hand" phenomena.
What macroeconomic effect does the "invisible hand" have on the quality of life for
members of the economic system?
List and describe the macroeconomic factors that led to the explosion in international
trade at the end of World War II. - Answers :* Bretton Woods (resulted in GATT, which
led to WTO) agreement: Industrialized nations agreed to "make commerce, not war" by
liberalizing international trade. Goal was to eliminate all barriers to trade (tariffs, quotas,
etc.) making import/ export cheaper and easier.
*Transportation has become ubiquitous, easy, and cheap.
*Information has become ubiquitous, easy, and cheap.
Describe and discuss the two shared "top priorities" of regulators and industry
organizations. What effect did economic deregulation have on the competitive
environment faced by transportation service providers in terms of costing, pricing, and
profitability? - Answers :1. Protecting the travelling public
-
2. Facilitating economic activity
-
Economic deregulation helped improve the competitive environment. Competed based
on price.
