ARE 112 Top Tested Questions and Certified Correct Answers 2024

Bounded Rationality - Rationality is limited when consumers make decisions. Think of marginal utility Transaction Costs - The cost of of making an economic trade in the market. Can drive organizational and industry structure cost of uncertainty - -Williamson interview -distinction between risk and uncertainty -risk is likelihood of negative outcome, probabiility can be assigned - uncertainty is when there are outcomes but no risk can be assigned Incomplete Contracts - A contract that does not specify, in an enforceable way, every aspect of the exchange that affects the interests of parties to the exchange (or of others). Economic contracts are incomplete Satisficing and Optimizing - accept an available option as satisfactory. Want to satisfice rather than optimize a transaction. Mother city - Caral- Built up other civilizations through trading, etc.; Holds importance in understanding the development of early civilizations. Ghengis Khan Management Style - - keep the best people - promote by ability not rank -train,train,train -mission driven organizations Wild West Management Style - -No history -Access to resources - An aspect of inevitability - Success supplants survival as mission -Opportunity driven organization -Much like the "start up's" of today Ringmaster or Ringleader (Circus) - The ringmaster or the ringleader sets the pace for the organization -Everyone knows what they are supposed to do - Everyone has a different task -The audience plays a part -A market driven organization Classical Management and its characteristics - - importance of ownership -railroads -oil -concentrated power -regional/national markets - compete with labor resources Scientific management - -Design jobs with standards leading to efficiency ii. Select workers to fit the job design iii. Train works to follow the design iv. Support workers by planning their work v. Careful selection and training of worker such as motion studies Bureaucracy - - Max weber - Division of labor ii. Hierarchy of authority iii. Formal rules iv. Impersonality