Podcast
Questions and Answers
What is the main purpose of implementing an incentive mechanism in the principal-agent relationship?
What is the main purpose of implementing an incentive mechanism in the principal-agent relationship?
- To maximize the agent's control over decisions
- To align the interests of the principal and agent (correct)
- To reduce the principal's oversight costs
- To increase the commission of the agent
Which of the following costs is NOT categorized as an agency cost?
Which of the following costs is NOT categorized as an agency cost?
- Information costs (correct)
- Oversight costs
- Guarantee costs
- Residual loss costs
Under the Resource-Based View of the firm, what characteristic of resources contributes to sustained competitive advantage?
Under the Resource-Based View of the firm, what characteristic of resources contributes to sustained competitive advantage?
- Commonly used by multiple firms
- Easily substitutable
- Widely available in the market
- Valuable and difficult to imitate (correct)
Which type of firm is characterized by owning resources that are both public and private?
Which type of firm is characterized by owning resources that are both public and private?
What is a primary characteristic of industrial firms?
What is a primary characteristic of industrial firms?
What legal form allows for a business to be treated as a separate entity from its owners?
What legal form allows for a business to be treated as a separate entity from its owners?
What type of firm would likely have a turnover of less than €2 million?
What type of firm would likely have a turnover of less than €2 million?
Which of the following is NOT a type of ownership classification for firms?
Which of the following is NOT a type of ownership classification for firms?
What is a primary characteristic that differentiates firms from other organizations?
What is a primary characteristic that differentiates firms from other organizations?
Which theory describes the firm as a 'black box' focused on maximizing profit?
Which theory describes the firm as a 'black box' focused on maximizing profit?
Under which condition should a firm choose to make a product instead of buying it, according to Transaction Cost Theory?
Under which condition should a firm choose to make a product instead of buying it, according to Transaction Cost Theory?
What negative impact does disproportionate income inequality have on society?
What negative impact does disproportionate income inequality have on society?
According to Agency Theory, how is the firm conceptualized?
According to Agency Theory, how is the firm conceptualized?
What factors contribute to the existence of transaction costs as per Transaction Cost Theory?
What factors contribute to the existence of transaction costs as per Transaction Cost Theory?
Which of the following describes a key function of firms in the economic reality context?
Which of the following describes a key function of firms in the economic reality context?
What is a consequence of high unemployment in relation to social cohesion?
What is a consequence of high unemployment in relation to social cohesion?
Flashcards
Principal-Agent Problem
Principal-Agent Problem
A situation where the interests of a principal (e.g., business owner) and an agent (e.g., manager) acting on their behalf are not aligned, leading to potential conflicts and opportunistic behavior.
Incentive Mechanism
Incentive Mechanism
A mechanism designed to align the interests of the principal and agent, often involving financial incentives or performance-based rewards to ensure the agent acts in the best interest of the principal.
Oversight Costs
Oversight Costs
Costs incurred by the principal to monitor and control the agent's behavior, reduce information asymmetry, and mitigate opportunistic behavior.
Guarantee Costs
Guarantee Costs
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Residual Loss Costs
Residual Loss Costs
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Resource-Based View of the Firm (RBV)
Resource-Based View of the Firm (RBV)
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Competitive Advantage Factors
Competitive Advantage Factors
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Corporation
Corporation
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What are the key characteristics of an organization?
What are the key characteristics of an organization?
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What is the core function of a firm?
What is the core function of a firm?
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How are firms affected by their environment?
How are firms affected by their environment?
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How does a firm create value as a social entity?
How does a firm create value as a social entity?
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What is the core idea of Neoclassical Theory?
What is the core idea of Neoclassical Theory?
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What is the main point of Transaction Cost Theory?
What is the main point of Transaction Cost Theory?
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What is the fundamental concept of Agency Theory?
What is the fundamental concept of Agency Theory?
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What are the negative effects of income inequality and unemployment?
What are the negative effects of income inequality and unemployment?
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Study Notes
Course Information
- Course title: Business Economics
- Instructor: María Espadas Puyet
- Institution: CUNEF Universidad
- Course code: DADE-C
Table of Contents
- Unit 1: The Firm
- Nature of the firm
- Types of firms
- Ownership and management
- Entrepreneurship
- Unit 2: Theoretical Approaches to Management
- Classical approach
- Scientific Management
- General Administrative Theory
- Behavioural Approach
- Unit 3: Business Environment
- General environment (PESTEL)
- Competitive environment
- Porter's Five Forces
- Organizational culture
- Unit 4: Information and Decision Making
- Information and data
- Decision making
- Decision making approaches
- Information system and management
- Unit 5: Business Management
- Business administrators and managers
- Nature of manager's job
- Management functions
- Unit 6: Objectives and Growth of the Firm
- Economic goal and value creation (accounting profit, economic profit)
- Social responsibility, sustainability, and ethics
- The growth of the firm
- Innovation
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Description
This quiz covers key concepts in Business Economics, including the nature of firms, various management theories, and the business environment. Test your understanding of entrepreneurship, decision-making, and the objectives of firms. Ideal for students enrolled in the Business Economics course at CUNEF Universidad.
