1. If humans were only opportunistic, but not boundedly rational, which of the following approaches would be the most effective governance solution (prevents the most transaction costs for the least governance costs)?

A. Acquiring the exchange partner

B. Writing an outsourcing contract containing a general clause agreeing to work towards both party's best interest in the case of unexpected events

C. Writing an outsourcing contract containing all possible safeguards

D. Vertically integrating the exchange

2.

Vigorous domestic competition will likely a firm's competitive advantage internationally.

A. Mildly decrease

B. Increase

C. Strongly decrease

D. Do nothing for

3.

Under which of the following conditions is a firm LIKELY to have acquired an asset that meets the VRI test?

A. Firm purchased the asset from a firm in an industry with low competition

B. Firm doesn't have inferior information about the value of the asset

C. Firm fortuitously acquires the asset due to some historical contingency

D. Firm doesn't have existing capabilities that make the asset more valuable to that firm

4.

You received data from a market research firm and constructed a value curve in an attempt to develop a successful blue ocean strategy, which of the following next steps is the most likely to accomplish this goal?

A.Adding new product characteristics from another industry

B. Decreasing the value of current product characteristics that your customers indicated they do not like

C. Increasing the value of current product characteristics that customers indicated they like

D. Adding new product characteristics that your customers have indicated they want