Exam 1
Name _________________________________________ Last 4 digits of your A# _______________
1. Use the abridged article about McDonald’s on p. 7 to answer the following questions:
a. Explain the cost issues that McDonald’s is facing. (4 points)
b. Explain the demand issues that McDonald’s is facing. (4 points)
c. Explain the roles played by the price elasticity of demand and the income elasticity of demand in the menu decisions McDonald’s is contemplating. (6 points)
d. Why/how is the McRib helping McDonald’s profits? (4 points)
2. Use the abridged article about Uniqlo on p. 8 to answer the following questions: (4 points each)
a. Fast Retailing includes a presence in China. What learning economies might it already have in China?
b. Fast Retailing now has 5 stores in the US, with the newest one in San Francisco. What will it have to learn to be successful in San Francisco?
3. Use the abridged article about Tootsie Roll, Inc. on p. 9 to answer the following questions: (4 points each)
a. Describe two ways that buying Andes Mints would have provided economies of scale for Tootsie Roll.
b. Describe two ways that buying Andes Mints would have provided economies of scope for Tootsie Roll.
4. Use the abridged article about Hewlett-Packard on p. 10 to answer the questions below: (6 points each)
a. Which individuals mentioned in the article who you believe are both principals and agents? Explain why you think that.
b. Describe two major agency issues at Hewlett-Packard.
c. Describe two practices that could/should have been set up better within Hewlett-Packard to mitigate its agency problems.
d. Why is a corporation more likely to have agency issues than a sole proprietorship or a
1. Use the abridged article about McDonald’s on p. 7 to answer the following questions:
a. Explain the cost issues that McDonald’s is facing. (4 points)
b. Explain the demand issues that McDonald’s is facing. (4 points)
c. Explain the roles played by the price elasticity of demand and the income elasticity of demand in the menu decisions McDonald’s is contemplating. (6 points)
d. Why/how is the McRib helping McDonald’s profits? (4 points)
2. Use the abridged article about Uniqlo on p. 8 to answer the following questions: (4 points each)
a. Fast Retailing includes a presence in China. What learning economies might it already have in China?
b. Fast Retailing now has 5 stores in the US, with the newest one in San Francisco. What will it have to learn to be successful in San Francisco?
3. Use the abridged article about Tootsie Roll, Inc. on p. 9 to answer the following questions: (4 points each)
a. Describe two ways that buying Andes Mints would have provided economies of scale for Tootsie Roll.
b. Describe two ways that buying Andes Mints would have provided economies of scope for Tootsie Roll.
4. Use the abridged article about Hewlett-Packard on p. 10 to answer the questions below: (6 points each)
a. Which individuals mentioned in the article who you believe are both principals and agents? Explain why you think that.
b. Describe two major agency issues at Hewlett-Packard.
c. Describe two practices that could/should have been set up better within Hewlett-Packard to mitigate its agency problems.
d. Why is a corporation more likely to have agency issues than a sole proprietorship or a