CAPSTONE EXAM 1 AND 2 ACTUAL EXAM COMPLETE
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+
Which of the following factors best contributes to the US automotive industry being
characterized by high entry barriers? - ANSWER: car manufacturers require large-
scale production in order to be cost-competitive
The _____ allows the scanning, monitoring, and evaluation of change and trends in a
firm's macro environment - ANSWER: PESTEL framework
The government of Filvia has mandated that the standard minimum wage in the
country can be increased to $8000 per year. This has ensured that all firms in the
country pay their employees at least $000 per year, which has brought about a
higher standard of living for the people of Filvia. Which of the following factors in a
firm's general environment does this mandate best indicate? - ANSWER: legal factors
Which of the following represents an economic factor in a firm's external general
environment? - ANSWER: the stage of the business cycle that the country is in
Which of the following is an implication of low interest rates? - ANSWER: consumer
demand will increase
In a firm's external environment, ______ primarily capture population characteristics
related to age, gender, family size, ethnicity, sexual orientation, religion, and social
economics class. - ANSWER: Demographic Trends
Which of the following do the sociocultural forces in a firm's external environment
best represent? - ANSWER: the family size of the firm's target market
The primary objective of Porter's five forces model is to - ANSWER: understand the
profit potential of different industries
Which of the following statements is NOT true about the give forces in Porter's
competitive analysis model? - ANSWER: The stronger the five forces in an industry,
the greater the industry's profit potential
Consider the five forces in the airline industry, which of the following best explains
the situation in the industry? - ANSWER: Substitutes are readily available in the form
of trains and buses, thus reducing the profit potential of the industry
Which of the following is most likely an implication of new firms entering an
industry? - ANSWER: The incumbent firms will spend more to satisfy their existing
customers
, Given the industry structure in the automobile business, entering the auto
manufacturing industry does not seem advisable. Yet Tesla Motors is joining the fray.
Rather than attempting to compete head-on in internal combustion engines, Tesla
Motors is entering the all-electric car segment, a much less crowded niche in the
overall car industry. Which of the following is Tesla most hoping to benefit from this
market niche? - ANSWER: economies of scale
First Ledger Inc.,an auditing company, replaced its existing accounting software with
new accounting software from another supplier. Since the new software has
different features and abilities, First Ledger Inc. has had to spend $10,000 on training
its employees to use it. In this scenario, $10,000 represents Frist Ledger Inc.'s -
ANSWER: switching cost
In the aircraft manufacturing industry, at least for large commercial jets, Boeing and
Airbus are the only competitors. This is not a significant threat of entry because -
ANSWER: entering the aircraft manufacturing industry requires huge capital
investments
In an industry, the threat of entry is high when - ANSWER: capital requirements are
low
In which of the following situations is a company that exists in the
telecommunications industry most likely to face the highest threat of entry? -
ANSWER: if the industry has recently become deregulated
The relative bargaining power of suppliers is high when - ANSWER: suppliers provide
products that are differentiated
Soapsuds Inc., a manufacturer of cleaning agents, supplies its products to All Needs
Inc., a supermarket chain. it demands that All Needs create more shelf space in its
stores for Soapsuds' products. However, All needs Inc. refuses to do this. Instead, it
decides to produce its own range of cleaning agents with its own label "All Wash." In
this scenario, All Needs Inc. has exercised its bargaining power as a buyer through -
ANSWER: backward integration
Buyers are highly price sensitive when - ANSWER: they earn low profits or are
strapped for cash
When fashion magazines face competition from fashion blogs on the web, which of
the following forces in Michael Porter's five forces model primarily get strong? -
ANSWER: Threat of substitutes
When companies that manufacture shipping containers want to buy iron ore, the
purchase decision is solely based on price. This is because there are a large number
of sellers in the iron ore industry, and iron ore is a highly undifferentiated
commodity. Which of the following industry competitive structure does the iron ore
industry best illustrate? - ANSWER: perfect competition
QUESTIONS AND CORRECT DETAILED ANSWERS
(VERIFIED ANSWERS) |ALREADY GRADED A+
Which of the following factors best contributes to the US automotive industry being
characterized by high entry barriers? - ANSWER: car manufacturers require large-
scale production in order to be cost-competitive
The _____ allows the scanning, monitoring, and evaluation of change and trends in a
firm's macro environment - ANSWER: PESTEL framework
The government of Filvia has mandated that the standard minimum wage in the
country can be increased to $8000 per year. This has ensured that all firms in the
country pay their employees at least $000 per year, which has brought about a
higher standard of living for the people of Filvia. Which of the following factors in a
firm's general environment does this mandate best indicate? - ANSWER: legal factors
Which of the following represents an economic factor in a firm's external general
environment? - ANSWER: the stage of the business cycle that the country is in
Which of the following is an implication of low interest rates? - ANSWER: consumer
demand will increase
In a firm's external environment, ______ primarily capture population characteristics
related to age, gender, family size, ethnicity, sexual orientation, religion, and social
economics class. - ANSWER: Demographic Trends
Which of the following do the sociocultural forces in a firm's external environment
best represent? - ANSWER: the family size of the firm's target market
The primary objective of Porter's five forces model is to - ANSWER: understand the
profit potential of different industries
Which of the following statements is NOT true about the give forces in Porter's
competitive analysis model? - ANSWER: The stronger the five forces in an industry,
the greater the industry's profit potential
Consider the five forces in the airline industry, which of the following best explains
the situation in the industry? - ANSWER: Substitutes are readily available in the form
of trains and buses, thus reducing the profit potential of the industry
Which of the following is most likely an implication of new firms entering an
industry? - ANSWER: The incumbent firms will spend more to satisfy their existing
customers
, Given the industry structure in the automobile business, entering the auto
manufacturing industry does not seem advisable. Yet Tesla Motors is joining the fray.
Rather than attempting to compete head-on in internal combustion engines, Tesla
Motors is entering the all-electric car segment, a much less crowded niche in the
overall car industry. Which of the following is Tesla most hoping to benefit from this
market niche? - ANSWER: economies of scale
First Ledger Inc.,an auditing company, replaced its existing accounting software with
new accounting software from another supplier. Since the new software has
different features and abilities, First Ledger Inc. has had to spend $10,000 on training
its employees to use it. In this scenario, $10,000 represents Frist Ledger Inc.'s -
ANSWER: switching cost
In the aircraft manufacturing industry, at least for large commercial jets, Boeing and
Airbus are the only competitors. This is not a significant threat of entry because -
ANSWER: entering the aircraft manufacturing industry requires huge capital
investments
In an industry, the threat of entry is high when - ANSWER: capital requirements are
low
In which of the following situations is a company that exists in the
telecommunications industry most likely to face the highest threat of entry? -
ANSWER: if the industry has recently become deregulated
The relative bargaining power of suppliers is high when - ANSWER: suppliers provide
products that are differentiated
Soapsuds Inc., a manufacturer of cleaning agents, supplies its products to All Needs
Inc., a supermarket chain. it demands that All Needs create more shelf space in its
stores for Soapsuds' products. However, All needs Inc. refuses to do this. Instead, it
decides to produce its own range of cleaning agents with its own label "All Wash." In
this scenario, All Needs Inc. has exercised its bargaining power as a buyer through -
ANSWER: backward integration
Buyers are highly price sensitive when - ANSWER: they earn low profits or are
strapped for cash
When fashion magazines face competition from fashion blogs on the web, which of
the following forces in Michael Porter's five forces model primarily get strong? -
ANSWER: Threat of substitutes
When companies that manufacture shipping containers want to buy iron ore, the
purchase decision is solely based on price. This is because there are a large number
of sellers in the iron ore industry, and iron ore is a highly undifferentiated
commodity. Which of the following industry competitive structure does the iron ore
industry best illustrate? - ANSWER: perfect competition
