Kelley School of Business G202 Exam 1 (ECON-B 251) | 2026/2027 | A+ Grade
| Verified Questions and Answers | Complete Exam Preparation Study Guide
Competition in the marketplace tends to school managers to think in terms of: - (ANSWER)Outcomes
(Profits, Sales, Market Share, Etc...)
However, in interactions with non-market players, ____ gain in relative importance. -
(ANSWER)Processes (Oversight, Quality Assurance, Social Reputation, Etc...)
Corporate Social Strategy Incentives? - (ANSWER)1) Integrate non-market forces (Political, Economic,
Social, and Technological) and societal concerns into your market strategy.
2) Exploit non-market opportunities
3)Mitigate non-market risks.
4) Engage non-market stakeholders like politicians and activists.
What was BP's motivation? - (ANSWER)-Customers and building a brand to open more franchises
-Employees to recruit the best of the best
-Investors for funding
In commodity markets, _____ are most important for customers. Brand does not influence purchases of
commodities. - (ANSWER)price and convenience
Socially-responsible investors (SRIs) care. SRIs want: - (ANSWER)-high returns with no guilt
-Oil & Gas has high returns, but also high guilt (environmental degradation & climate change).-Beyond
Petroleum helps to remove the guilt.
The Beyond Petroleum brand resulted in heightened public expectations, especially from -
(ANSWER)non-governmental organizations (NGO-activists)
Greenpeace gave BP the _____ award. - (ANSWER)Greenwash of the year
,Kelley School of Business G202 Exam 1 (ECON-B 251) | 2026/2027 | A+ Grade
| Verified Questions and Answers | Complete Exam Preparation Study Guide
BP found an avenue to create "shared value" by integrating societal concerns over fossil fuels with their
core market strategy. Explain this with each group: - (ANSWER)Shared value with employees led to
improved recruiting, retention, and worker productivity.-
Shared value with SRIs led to a larger capital investment to cover the high fixed costs of R&D.-
Shared value with government officials led to policies that guaranteed demand for BP's solar.
Name some of the "societal concerns" BP used in their social strategy: - (ANSWER)Examples of societal
concerns: environment & climate change, human rights, diversity and inclusion, gender equality, fair
trade, no sweatshop, animal rights, anti-GMO, income inequality and poverty, health and substance
abuse, etc...
Define Lobbying/rent seeking. - (ANSWER)Lobbying/Rent Seeking: devoting resources to influence public
policy formation in order to bring more income to your interests.
What can the cost of lobbying create? - (ANSWER)The cost of lobbying can produce significant
inefficiencies if its main affect is solely income redistribution.
Name 3 functions of lobbyists. - (ANSWER)-Find political opportunities and threats.-Inform politicians
and influence public opinion.-Form coalitions: identify groups with 'similar' interests
What is the special interest effect? - (ANSWER)Small group of people, with incentive to take political
action, receive benefits at the expense of a large unorganized group of people.
Describe largely, widely dispersed groups: - (ANSWER)Rarely gain political power because they do not
have incentive to take action.-The individual cost of taking action often exceeds the individual benefit.
, Kelley School of Business G202 Exam 1 (ECON-B 251) | 2026/2027 | A+ Grade
| Verified Questions and Answers | Complete Exam Preparation Study Guide
Describe small, concentrated groups: - (ANSWER)Gain political power as a result of their incentive to
take action. -The individual benefit of taking action often exceeds the individual cost.
Describe majoritarian groups - (ANSWER)No special interest groups take action on either side of the
issue.-Example: Social Security.-Lobbying does not occur.
Describe client politics - (ANSWER)-One special interest group is active in favor of an issue.-Example:
USDA Foreign Advertising Funds (MAP)
-Lobbying will likely be successful.
Describe interest group politics. - (ANSWER)-Active special interest groups are on both sides of the
issue.-Example: Legalizing Marijuana: (NORML versus CALM)-Outcomes depend on the relative strength
of lobbying.
Describe entrepreneurial politics - (ANSWER)-One special interest group is active against an issue.
-Example: Nuclear waste dumps.-Successful lobbying will be costly.
Explicit costs: - (ANSWER)when a monetary payment is made.
Example: Wages paid to labor.
Implicit costs: - (ANSWER)involve the firm's resources, but do not have a monetary payment.
Example: Opportunity cost of the owner's investment.
Economic profit: - (ANSWER)Revenues minus all costs.
Implicit costs are calculated as a normal rate of return.
Normal rate of return: - (ANSWER)what firms could get by investing in businesses with similar risk.
| Verified Questions and Answers | Complete Exam Preparation Study Guide
Competition in the marketplace tends to school managers to think in terms of: - (ANSWER)Outcomes
(Profits, Sales, Market Share, Etc...)
However, in interactions with non-market players, ____ gain in relative importance. -
(ANSWER)Processes (Oversight, Quality Assurance, Social Reputation, Etc...)
Corporate Social Strategy Incentives? - (ANSWER)1) Integrate non-market forces (Political, Economic,
Social, and Technological) and societal concerns into your market strategy.
2) Exploit non-market opportunities
3)Mitigate non-market risks.
4) Engage non-market stakeholders like politicians and activists.
What was BP's motivation? - (ANSWER)-Customers and building a brand to open more franchises
-Employees to recruit the best of the best
-Investors for funding
In commodity markets, _____ are most important for customers. Brand does not influence purchases of
commodities. - (ANSWER)price and convenience
Socially-responsible investors (SRIs) care. SRIs want: - (ANSWER)-high returns with no guilt
-Oil & Gas has high returns, but also high guilt (environmental degradation & climate change).-Beyond
Petroleum helps to remove the guilt.
The Beyond Petroleum brand resulted in heightened public expectations, especially from -
(ANSWER)non-governmental organizations (NGO-activists)
Greenpeace gave BP the _____ award. - (ANSWER)Greenwash of the year
,Kelley School of Business G202 Exam 1 (ECON-B 251) | 2026/2027 | A+ Grade
| Verified Questions and Answers | Complete Exam Preparation Study Guide
BP found an avenue to create "shared value" by integrating societal concerns over fossil fuels with their
core market strategy. Explain this with each group: - (ANSWER)Shared value with employees led to
improved recruiting, retention, and worker productivity.-
Shared value with SRIs led to a larger capital investment to cover the high fixed costs of R&D.-
Shared value with government officials led to policies that guaranteed demand for BP's solar.
Name some of the "societal concerns" BP used in their social strategy: - (ANSWER)Examples of societal
concerns: environment & climate change, human rights, diversity and inclusion, gender equality, fair
trade, no sweatshop, animal rights, anti-GMO, income inequality and poverty, health and substance
abuse, etc...
Define Lobbying/rent seeking. - (ANSWER)Lobbying/Rent Seeking: devoting resources to influence public
policy formation in order to bring more income to your interests.
What can the cost of lobbying create? - (ANSWER)The cost of lobbying can produce significant
inefficiencies if its main affect is solely income redistribution.
Name 3 functions of lobbyists. - (ANSWER)-Find political opportunities and threats.-Inform politicians
and influence public opinion.-Form coalitions: identify groups with 'similar' interests
What is the special interest effect? - (ANSWER)Small group of people, with incentive to take political
action, receive benefits at the expense of a large unorganized group of people.
Describe largely, widely dispersed groups: - (ANSWER)Rarely gain political power because they do not
have incentive to take action.-The individual cost of taking action often exceeds the individual benefit.
, Kelley School of Business G202 Exam 1 (ECON-B 251) | 2026/2027 | A+ Grade
| Verified Questions and Answers | Complete Exam Preparation Study Guide
Describe small, concentrated groups: - (ANSWER)Gain political power as a result of their incentive to
take action. -The individual benefit of taking action often exceeds the individual cost.
Describe majoritarian groups - (ANSWER)No special interest groups take action on either side of the
issue.-Example: Social Security.-Lobbying does not occur.
Describe client politics - (ANSWER)-One special interest group is active in favor of an issue.-Example:
USDA Foreign Advertising Funds (MAP)
-Lobbying will likely be successful.
Describe interest group politics. - (ANSWER)-Active special interest groups are on both sides of the
issue.-Example: Legalizing Marijuana: (NORML versus CALM)-Outcomes depend on the relative strength
of lobbying.
Describe entrepreneurial politics - (ANSWER)-One special interest group is active against an issue.
-Example: Nuclear waste dumps.-Successful lobbying will be costly.
Explicit costs: - (ANSWER)when a monetary payment is made.
Example: Wages paid to labor.
Implicit costs: - (ANSWER)involve the firm's resources, but do not have a monetary payment.
Example: Opportunity cost of the owner's investment.
Economic profit: - (ANSWER)Revenues minus all costs.
Implicit costs are calculated as a normal rate of return.
Normal rate of return: - (ANSWER)what firms could get by investing in businesses with similar risk.
