1. According to Porter, an industry with low barriers to entry

   	A.	Should be avoided
   	B.	Will typically be hypercompetitve
   	C.	Will be expensive to get into
   	D.	Will probably be an industry in decline

2 points

QUESTION 2

1. The Value Added Tax is

   	A.	Borne by the ultimate consumer of goods
   	B.	A regressive tax
   	C.	Both of the above
   	D.	None of the above

2 points

QUESTION 3

1. Solar power is a substitute product for

   	A.	Wind power
   	B.	Coal
   	C.	Petroleum products
   	D.	All of the above

QUESTION 4

1. The three sectors of the oil industry are

   	A.	Shallow wells, mid-depth wells, and deep wells
   	B.	Onshore, offshore, and shipping
   	C.	Exploration, refining, and gas stations
   	D.	Upstream, mid-stream, and down-stream

2 points

QUESTION 5

1. According to Porter, a product with many substitutes

   	A.	Becomes more valuable in the marketplace
   	B.	Must fight harder to secure or maintain a competitive position
   	C.	Can easily reclaim its position of favor
   	D.	Should be discontinued

2 points

QUESTION 6

1. In a joint venture set up under the "jointly controlled assets" model

   A.

   Each venturer recognizes its share of the JV's revenues and expenses

   B.

   Is usually set up as a separate legal entity such as a company

   C.

   Each venturer recognizes its share of the assets held and the liabilities incurred by the JV

   D.

   Most often found in the downstream

   QUESTION 7

   A progressive tax structure

   	A.	Allows the rich to find loopholes that lower their taxes
   	B.	Imposes a flat rate on everyone regardless of income
   	C.	Increases the marginal tax rate as the income brackets increase
   	D.	Is generally disliked by poor people

   Rivalry tends to be high among competitors UNLESS

   A.

   There are many competitors of roughly the same size and market position

   B.

   Exit barriers are high

   C.

   There are high fixed costs creating incentive for price cutting

   D.

   The industry is young and in a fast growth stage

   QUESTION 10

   Oil producing nations

   	A.	Are required to be members of OPEC
   	B.	Will normally use oil as a weapon against oil consuming nations
   	C.	Try to increase the price of oil by producing as much as they can
   	D.	Are held to the oil prices dictated by the commodities exchanges

   The gift tax

   	A.	Provides a tax deduction for giving gifts to friends
   	B.	Provides a tax deduction for giving fits to charitable organizations
   	C.	Encourages wealthy people to gift their wealth to their heirs
   	D.	Prevents wealthy people from trying to defeat the estate tax

   2 points

   QUESTION 12

   2 points

   QUESTION 11

   OPEC set production quotas such that prices stay reasonably low

   	A.	Because they have plenty of money
   	B.	Because they fear getting into a war with each other
   	C.	To prevent the proliferation of substitute products
   	D.	Because poor nations would not be able to afford the oil if priced too high

   2 points

   QUESTION 9

   2 points

   QUESTION 8

   Porter indicates suppliers will have strong bargaining power when

   	A.	There are many of them
   	B.	They have local operations
   	C.	There are few of them
   	D.	They sell items that are easily replaced