Kelley School of Business - G202 Exam 1 verified questions and
answers (ECONB 251) 2026\2027 A+ Grade
Competition in the marketplace tends to school managers to think in terms of:
- correct answer Outcomes (Profits, Sales, Market Share, Etc...)
However, in interactions with non-market players, ____ gain in relative importance.
- correct answer Processes (Oversight, Quality Assurance, Social Reputation, Etc...)
Corporate Social Strategy Incentives?
- correct 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?
- correct 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.
- correct answer price and convenience
Socially-responsible investors (SRIs) care. SRIs want:
- correct 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
- correct answer non-governmental organizations (NGO-activists)
Greenpeace gave BP the _____ award.
- correct answer Greenwash of the year
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:
- correct 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:
- correct 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.
- correct 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?
- correct answer The cost of lobbying can produce significant inefficiencies if its main affect is solely
income redistribution.
Name 3 functions of lobbyists.
- correct 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?
- correct 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:
- correct 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.
Describe small, concentrated groups:
- correct 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
- correct answer No special interest groups take action on either side of the issue.-Example: Social
Security.-Lobbying does not occur.
Describe client politics
- correct 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.
- correct 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
- correct answer -One special interest group is active against an issue.
-Example: Nuclear waste dumps.-Successful lobbying will be costly.
Explicit costs:
- correct answer when a monetary payment is made.
Example: Wages paid to labor.
answers (ECONB 251) 2026\2027 A+ Grade
Competition in the marketplace tends to school managers to think in terms of:
- correct answer Outcomes (Profits, Sales, Market Share, Etc...)
However, in interactions with non-market players, ____ gain in relative importance.
- correct answer Processes (Oversight, Quality Assurance, Social Reputation, Etc...)
Corporate Social Strategy Incentives?
- correct 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?
- correct 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.
- correct answer price and convenience
Socially-responsible investors (SRIs) care. SRIs want:
- correct 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
- correct answer non-governmental organizations (NGO-activists)
Greenpeace gave BP the _____ award.
- correct answer Greenwash of the year
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:
- correct 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:
- correct 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.
- correct 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?
- correct answer The cost of lobbying can produce significant inefficiencies if its main affect is solely
income redistribution.
Name 3 functions of lobbyists.
- correct 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?
- correct 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:
- correct 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.
Describe small, concentrated groups:
- correct 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
- correct answer No special interest groups take action on either side of the issue.-Example: Social
Security.-Lobbying does not occur.
Describe client politics
- correct 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.
- correct 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
- correct answer -One special interest group is active against an issue.
-Example: Nuclear waste dumps.-Successful lobbying will be costly.
Explicit costs:
- correct answer when a monetary payment is made.
Example: Wages paid to labor.
