MBA 620 Actual Exam Newest 2025/2026 Complete Questions And Correct Detailed Answers

Agency Problem - SOLUTION=the possibility of conflict of interest between the owners and management of a firm A firm operating in a highly competitive industry attempts to win customers by offering the lowest prices. Which strategy is it pursuing? A. Differentiation B. Cost leadership C. Market penetration D. Diversification Answer: B. Cost leadership Which framework best evaluates external factors such as political, economic, social, technological, environmental, and legal trends? A. SWOT B. PESTEL C. Value Chain D. Porter’s Five Forces Answer: B. PESTEL Which element of SWOT analysis examines factors like skilled employees, patents, and brand reputation? A. Opportunities B. Weaknesses C. Strengths 2 | P a g e D. Threats Answer: C. Strengths When customers can easily switch to substitutes, which force in Porter’s Five Forces increases? A. Supplier power B. Buyer power C. Threat of substitutes D. Industry rivalry Answer: C. Threat of substitutes A company acquires its distributor to gain more control over product delivery. This is an example of: A. Backward integration B. Forward integration C. Horizontal integration D. Diversification Answer: B. Forward integration Which decision-making approach emphasizes optimization under perfect information? A. Behavioral model B. Classical model C. Incremental model D. Intuitive model Answer: B. Classical model An entrepreneur chooses to focus on a niche market by offering a specialized product. Which strategy is being used? A. Cost leadership B. Broad differentiation C. Focus strategy 3 | P a g e D. Retrenchment Answer: C. Focus strategy In the BCG Growth-Share Matrix, a business unit with high market share and low growth is considered a: A. Question mark B. Star C. Cash cow D. Dog Answer: C. Cash cow Which financial tool is most appropriate for determining whether a project generates value after accounting for the cost of capital? A. Payback period B. ROI C. Net Present Value (NPV) D. Break-even analysis Answer: C. Net Present Value (NPV) The concept of “core competencies” was introduced by: A. Michael Porter B. Henry Mintzberg C. Prahalad and Hamel D. Peter Drucker Answer: C. Prahalad and Hamel A company develops different pricing strategies for different customer groups. This practice is called: A. Penetration pricing B. Price skimming C. Price discrimination D. Loss-leader pricing Answer: C. Price discrimination 4 | P a g e When an organization downsizes and reduces costs to survive an economic downturn, it is engaging in: A. Growth strategy B. Stability strategy C. Retrenchment strategy D. Market development strategy Answer: C. Retrenchment strategy In a value chain, activities such as inbound logistics, operations, and outbound logistics are categorized as: A. Support activities B. Primary activities C. Peripheral activities D. Strategic alliances Answer: B. Primary activities The primary role of managerial economics in decision-making is to: A. Focus only on marketing issues B. Apply economic principles to business decisions C. Eliminate risk in strategy D. Ignore opportunity costs Answer: B. Apply economic principles to business decisions The break-even point occurs when: A. Total cost equals total revenue B. Variable costs equal fixed costs C. Marginal cost equals marginal revenue D. Profit margin equals zero Answer: A. Total cost equals total revenue If the price elasticity of demand is greater than 1, demand is: A. Perfectly inelastic B. Elastic 5 | P a g e C. Unit elastic D. Inelastic Answer: B. Elastic Which leadership style emphasizes rewards and punishments to achieve compliance? A. Transformational B. Transactional C. Democratic D. Laissez-faire Answer: B. Transactional A firm using differentiation strategy should focus most on: A. Efficiency in production B. Standardization of processes C. Innovation and brand image D. Reducing overhead costs Answer: C. Innovation and brand image The learning curve concept suggests that as cumulative production increases: A. Costs per unit increase B. Costs per unit decrease C. Productivity declines D. Margins remain constant Answer: B. Costs per unit decrease