C211 - Practice Competency 2

The _____ refers to the internalized, taken for granted values and beliefs that guide individual and firm behavior

• regulatory pillar

  
  

• cognitive pillar

• normative pillar

• formal pillar

  
  

_____ are represented by company policies, regulations, and rules.

• Normative institutions

• Cognitive institutions

• Sociocultural institutions within

• Formal institutions

Which of the following is true of private ownership?

• Firms are established by entrepreneurs, owners, and investors.

• Firm's objective would be to find a “fair” deal for all stakeholders.

• Management appointments are made by government officials and bureaucrats who may also use non-economic criteria.

• Firm deemed “too big to fail”, may be supported by taxpayer dollars indefinitely.

The main supportive pillars of the informal institutions are _____.

• normative and cognitive

• cognitive and regulatory

• regulatory and normative

  
  

• regulatory, normative, and cognitive

Which of the following is true of a command economy?

• It does not allow private entrepreneurship within its company.

• All factors of production are privately owned.

• The government only performs those functions that the private sector within the company cannot perform

• It strictly follows the doctrine of laissez faire within its company.

Which of the following is an example of an intellectual property?

• Website

• Factory building

• Office space

• Car design

_____ refers to a legal system based on religious teachings.

• Theocratic law

• Civil law

• Right-wing totalitarian law

• Common law

Which of the following is a proposition of the institution-based view?

• When formal constraints are unclear, informal constraints will play a larger role in reducing uncertainty and providing constancy to managers and the firm.

• Decisions based on bounded rationality should be avoided.

  
  

• Dependency on informal constraints will always increase the political risks associated with a firm.

  
  

• 
  Informal constraints always increases transaction costs for the firm.

  
  

Which of the following is the argument used by proponents of the “cultural” explanation for the difference in the success of car manufacturers across the globe?

• That rich countries generally tend to have a democratic style of government

• That rich countries tend to be endowed with natural resources

• That rich countries tend to have better market-supporting institutions
  

• That rich countries have a smarter and harder-working population

Maserati, a luxury vehicle manufacturer, is concerned about which of the following as an example of intellectual property rights?

• Rights associated with ownership of trademarks

• Rights associated with ownership of business contracts

• Rights associated with ownership of vehicles

• Rights associated with ownership of buildings