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ECO 550 Week 5 Discussion Question – Strayer New
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Week 5 Discussion
"Market Structures"
Managerial Economist awareness of consequences of Wealth Inequality across different states in U.S., across Canada, and across World. http://www.youtube.com/watch?v=cZ7LzE3u7Bw and Robert Reich trailer of film on the subject http://www.youtube.com/watch?v=YCbAyk8aRxI and this on heathcare "hotspots in the U,S. - the case of Camden NJ https://www.youtube.com/watch?v=0DiwTjeF5AU
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ECO 450 Week 5 Mid-Term Exam – Strayer
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Chapters 1 Through 7
ECO 450 Week 2 Quiz – Strayer
Chapter 1
Individuals and Government
True/False Questions
1. On average, persons in the United States devote more of their annual budgets to taxes than they do to food.
2. A universally observed function of government is the establishment of property rights.
3. The total share of GDP accounted for by government spending in the United States has declined significantly since 1980.
4. In 1929, the federal government spent more than was spent by state and local governments.
5. Since 1930, the percent of GDP devoted to government expenditures has more than tripled.
6. The costs imposed by government regulations on business firms are included in budget data on government expenditures.
7. Government consumption does not require resources to be reallocated from private to government use.
8. Since 1959, the percent of federal government expenditures devoted to transfers has increased by more than 50 percent.
9. Transfer payments, including Social Security and welfare and medical assistance, account for nearly 60 percent of federal government expenditures.
10. Interest on the federal government’s debt accounts for about 20 percent of federal government expenditure.
11. Federal grants-in-aid to state and local governments finance about 20 percent of annual spending by these governments.
12. The federal government allocates about 10 percent of its budget to Social Security.
13. State and local governments in the United States spend a bit more than one-third of their budgets on education.
14. Sales taxes account for about 22 percent of state and local government revenue in the United States.
15. The federal government obtains about half of its revenue annually from retail sales taxes.
16. State governments do not fund any part of Medicaid.
17. The social compact is an 18th century idea by political theorists.
18. The proportion of revenue received by the federal government from payroll taxes is higher than the proportion of revenue received by state and local governments from payroll taxes.
Multiple Choice Questions
1. The real cost of government goods and services is:
a. money.
b. taxes.
c. the private goods and services foregone.
d. inflation.
2. If the economy is currently operating on a point on the production possibility curve for government goods and services versus private goods and services,
a. an annual increase in government goods and services can be obtained without any sacrifice of annual private goods and services.
b. it will be impossible to increase annual output of government goods and services.
c. a decrease in the annual output of government goods and services will have no effect on the annual output of private goods and services.
d. a decrease in the annual output of government goods and services will allow an increase in annual output of private goods and services.
3. Government goods and services are usually:
a. not rationed by prices.
b. sold in markets.
c. made available to persons according to their willingness and ability to pay.
d. financed by revenue obtained from sales.
4. Taxes:
a. are prices paid for the right to consume government goods and services.
b. are compulsory payments not directly related to the benefits received from government goods and services.
c. never affect economic incentives.
d. are used by private firms to raise revenue.
5. A mixed economy is one in which:
a. there are no markets.
b. government activity accounts for a significant proportion of the value of goods and services produced.
c. there is no government.
d. all goods and services are sold in markets.
6. Government purchases for consumption and investment:
a. are made to acquire resources necessary to producegovernment goods and services.
b. are designed to redistribute purchasing power among citizens.
c. have increased in importance as a percent of federal spending since 1959.
d. do not withdraw resources from private use.
7. Transfer payments by the federal government in the United States account for about:
a. 25 percent of federal government expenditures.
b. 10 percent of federal government expenditures.
c. 40 percent of GDP.
d. 60 percent of federal government expenditures.
8. Total annual expenditures by federal, state, and local governments in the United States in the 1990s accounted for roughly:
a. 20 percent of annual GDP.
b. 30 percentof annual GDP.
c. 50 percentof annual GDP.
d. 75 percent of annual GDP.
9. Federal government expenditures in the United States account for about:
a. 23 percent of annual GDP.
b. 33 percent of annual GDP.
c. 43 percent of annual GDP.
d. 53 percent of annual GDP.
10. About 80 percent of federal receipts are accounted for by:
a. corporate profits taxes.
b. sales taxes.
c. excise taxes.
d. payroll and personal income taxes.
11. If the economy is operating at full employment and using resources efficiently, then an increase in spending for homeland security this year will:
a. require that resources be reallocated to homeland security services without sacrificing any alternative goods and services.
b. be possible if resources are reallocated to homeland security services, but it will also mean that the output of some other goods and services will have to fall.
c. be impossible.
d. be possible only if there is an improvement in technology or more resources made available.
12. Which of the following is an example of a political institution?
a. a market
b. elections with winners determined by majority rule
c. representative government
d. both (b) and (c)
13. Nonmarket rationing means that:
a. those willing to pay can buy as much of a product as they choose.
b. prices are used to sell products.
c. goods and services are not rationed by prices.
d. willingness to pay is not a factor in determining who can enjoy a good or service.
e. both (c) and (d)
14. The U.S. economy is best characterized as a:
a. pure market economy.
b. socialist economy.
c. pure capitalistic, free-enterprise system.
d. mixed economy.
15. State and local government expenditure in the United States accounts for about:
a. 32 percent of GDP.
b. 22 percent of GDP.
c. 12 percent of GDP.
d. 7 percent of GDP.
16. Following the circular flow of a mixed economy, firms receive a flow of dollars from and send goods and services to:
a. Output Markets.
b. Input Markets.
c. Households.
d. Government.
17. Following the circular flow of a mixed economy, which entity or entities distribute resources?
a. Firms only.
b. Input Markets only.
c. Government and Households.
d. Households and Input Markets.
18. When has the U.S. experienced government expenditures in the range of 40% to 50% of GDP?
a. 2000 to 2009.
b. 1950 to 1959.
c. 1940 to 1949.
d. It has never happened.
19. In 2008, which country listed below has the highest percentage of government spending relative to GDP?
a. France.
b. Ireland.
c. Japan.
d. Canada.
20. The old-age dependency ratio is:
a. the proportion of the population that is 60 years or older over the proportion of the population that is less than 60 years of age.
b. the proportion of the population that is 65 years or older over the proportion of the population that is 15 to 64 years of age.
c. the proportion of the population that is 70 years or older over the proportion of the population that is 20 to 69 years of age.
d. the total government expenditure on programs for the elderly over the number of citizens that are 65 years or older.
ECO 450 Week 3 Quiz – Strayer
Chapter 2
Efficiency, Markets, and Government
True/False Questions
1. The normative approach to public finance prescribes certain actions to achieve predetermined criteria.
2. Positive economic analysis is based on underlying value judgments.
3. “The government should abolish tariffs to achieve efficiency” is a normative statement.
4. It is possible for efficiency not to be attained even if all production is carried on without waste.
5. Efficiency is attained when resources are used each year in such a way that no further net gain is possible.
6. The efficient annual output of any given good is attained if that good is made available in amounts up to the point at which the total social benefit of the good equals the total social cost.
7. If the marginal social benefit of smoke detectors exceeds its marginal social cost, then additional net gains are possible from an increased annual smoke detector production.
8. Monopoly power causes losses in efficiency because the marginal social benefit of output exceeds its marginal social cost at the monopoly output.
9. Government regulations that require airlines to serve routes for which the maximum price that passengers are willing to pay for a trip fall short of the minimum price that sellers are willing to accept are likely to cause losses in efficiency.
10. Points lying below a utility possibility curve are efficient.
11. Government programs can achieve efficiency when the gains to gainers from those policies exceed the losses to those who bear the costs.
12. If the marginal social cost of beer production exceeds its marginal social benefit, then more than the efficient about of beer is being produced.
13. Efficient outcomes are often viewed as inequitable.
14. If it is not possible to make someone better off without harming another, then resource allocation is efficient.
15. Compensation criteria are used to argue that changes in resource allocation should be made if the gains to some groups outweigh the losses to others, even though compensation for losses is not actually made.
16. All points on a utility possibility curve are efficient but differ in terms of the distribution of well-being.
17. A tax on a product shifts the demand curve.
18. A government subsidized price for a commodity that is higher than the market driven price results in oversupply relative to the efficient allocation.
19. When comparing the allocation of two goods relative to two consumers with individual utility functions, multiple points of Pareto efficiency can exist.
Multiple Choice Questions
1. Positive economics:
a. makes recommendations designed to achieve certain goals.
b. establishes cause-and-effect relationships between economic variables.
c. is based on value judgments.
d. can never be used to make predictions.
2. If the efficient output of a good is produced each week, then the:
a. marginal social benefit of the good equals its marginal social cost each week.
b. marginal social benefit of the good is at a maximum.
c. total social benefit of the good is at a maximum.
d. total social benefit of the good equals its total social cost.
3. If the marginal social benefit of a good exceeds the marginal social cost at the current monthly output, then:
a. it will be possible to make buyers of the good better off without harming sellers of the good.
b. it will be possible to make sellers of the good better off without harming buyers of the good.
c. either (a) or (b)
d. a reduction in monthly output will be required for efficiency.
4. The marginal social cost of bread exceeds the marginal social benefit at the current weekly output. Therefore,
a. the marginal net benefit of bread is positive.
b. the output of bread is efficient.
c. a reduction in weekly output of bread is necessary to achieve efficiency.
d. an increase in weekly output of bread is necessary to achieve efficiency.
5. The total social benefit of automobiles equals the total social cost at current annual output. Then it follows that:
a. the annual output of automobiles is efficient.
b. the annual output of automobiles exceeds the efficient amount.
c. less than the efficient annual output of automobiles is produced.
d. it is not possible to make buyers of automobiles better off without harming sellers.
e. both (a) and (d)
6. Eggs are sold in a perfectly competitive market. No persons other than the buyers and sellers of eggs are affected in any way when eggs are traded in the market. Then it follows that:
a. the price of eggs equals the marginal social cost of eggs.
b. the price of eggs equals the marginal social benefit of eggs.
c. the price of eggs exceeds the marginal social benefit of eggs.
d. both (a) and (b)
7. Diamonds are sold by a monopoly firm that maximizes profits. Then it follows that:
a. the marginal social benefit of diamonds exceeds its marginal social cost.
b. the marginal social cost of diamonds exceeds its marginal social benefit.
c. the price of diamonds equals its marginal social cost.
d. the price of diamonds exceeds its marginal social benefit.
e. both (c) and (d)
8. Points on a utility possibility curve represent:
a. a given distribution of well-being between two persons.
b. an efficient allocation of resources.
c. the maximum well-being of any one person, given the resources available and the well-being of another person.
d. all of the above
9. If efficiency has been attained,
a. it will be possible to make any one person better off without harming another.
b. it will not be possible to make any one person better off without harming another.
c. perfect competition must exist.
d. the opportunity cost of any change in resource use must be zero.
10. A move from an inefficient resource allocation to an efficient one:
a. will always be unanimously approved, even if gainers do not compensate losers.
b. will be unanimously opposed.
c. will be unanimously approved if gainers compensate losers.
d. can never result in losers.
11. Which of the following is a normative statement?
a. When interest rates rise, the quantity of loanable funds demanded for new mortgages will decline.
b. To achieve efficiency, governments should prevent monopoly in markets.
c. Unemployment increases during a recession.
d. When governments increase income tax rates, people work less.
12. Normative economics:
a. is not based on underlying value judgments.
b. makes recommendations to achieve efficient outcomes.
c. establishes cause-and-effect relationships between economic variables.
d. makes “if…then” type statements and checks them against the facts.
13. The extra benefit on one more unit of a good or service is its:
a. marginal cost.
b. marginal benefit.
c. total benefit.
d. total cost.
14. If the efficient output of computers is achieved this year, then market price of computers is equal to:
a. the marginal social benefit of computers.
b. the marginal social cost of computers.
c. the total social cost of computers.
d. the total social benefit of computers.
e. both (a) and (b)
15. Suppose the efficient output currently prevails in the market for ice cream. A tax on ice cream consumption will:
a. allow efficiency to continue to prevail in the market.
b. result in more than the efficient output in the market.
c. result in less than the efficient output in the market.
d. cause the marginal social cost of ice cream to exceed its marginal social benefit at the market equilibrium output.
16. Positive economics is:
a. an equity based approach in which income should be redistributed.
b. an objective approach without a particular goal based on underlying values.
c. a goal oriented approach based on desired policy outcomes.
d. a belief that governments can implement economic policies for the greater good of society.
17. Normative economics is:
a. completely free of any value system.
b. completely objective.
c. based on a a conscious effort to implement a particular social goal.
d. an approach that determines the effect of particular actions without judgment of the result being good or bad.
18. An efficient level of output means:
a. the total social benefit less the total social cost is maximized.
b. the total social benefit is below the total social cost.
c. the total social cost equals the total social benefit.
d. the total social benefit less the total social cost can be improved.
19. If a government desires to increase production beyond the current competitively determined efficient level, the government should:
a. tax the good.
b. subsidize the good at a price higher than its current price.
c. set the price below its current price.
d. impose a fixed fee whenever the good is purchased.
20. Pareto efficiency between two consumers is achieved:
a. only when the individual marginal rates of substitution are equal to the marginal rate of transformation.
b. only when the individual marginal rates of substitution are less than one, but not necessarily equal.
c. only when the individual marginal rates of substitution are greater than one and equal.
d. only when the individual marginal rates of substitution are equal.
Chapter 3
Externalities and Government Policy
True/False Questions
1. If a negative externality exists for sales of gasoline in a competitive market, more than the efficient amount of gasoline will be sold per year.
2. If the marginal external cost of pollution increases with the annual output of polluting goods, then the total external cost will increase at a constant rate with annual output.
3. When a positive externality exists, benefit to third parties other than the buyers and sellers of a good will result from market exchange of the good.
4. The marginal external benefit of the sale of smoke detectors in a city declines with annual output. The total external benefit of smoke detectors will therefore eventually become zero.
5. When a negative externality exists, the marginal social cost of annual output sold in a competitive market will exceed the marginal social benefit of that output in equilibrium.
6. If a negative externality is associated with the sale of wood stoves, then the marginal private cost of those stoves is less than their marginal social cost.
7. If a positive externality is associated with college enrollment, then when college instruction is provided in a competitive market, the marginal social benefit of enrollment will exceed its marginal social cost in equilibrium.
8. At the current level of annual supply of inoculations against polio, the marginal external benefit of an inoculation is zero. To achieve efficiency, a corrective subsidy must be provided to those being inoculated.
9. To internalize an externality, a corrective tax must be set equal to the marginal external cost.
10. According to the Coase theorem, corrective taxes are necessary to internalize negative externalities when the transactions costs of exchanging property rights to use resources are zero.
11. The efficient amount of pollution abatement is likely to be 100 percent.
12. Pollution rights can be used to price the right to emit pollutants and to provide incentives to reduce emissions by profit-maximizing firms.
13. Emissions standards allow businesses to emit waste at zero cost until the limits set by the standards are reached.
14. The market for sulfur dioxide allowance trading has lowered the cost of achieving a given reduction in sulfur dioxide emissions by electric power-generating plants.
15. Command-and-control regulation to reduce emissions is likely to be a less costly way of reducing a given amount of emissions than tradeable emissions permits.
16. When negative externalities exist, perfectly competitive markets produce less than the efficient output.
17. A toll road used to subsidize public transportation in an effort to reduce pollution is an example of a corrective tax.
18. Assuming no externalities and a competitive environment, the marginal private cost is equal to the marginal social cost.
19. Assuming a negative externality, the price of a good will be lower than if the price was set in a competitive environment without an externality.
Multiple Choice Questions
1. A negative externality results from the sale of firewood in competitive markets. Then it follows that:
a. the marginal private cost of firewood is less than its marginal social cost.
b. the marginal private cost of firewood exceeds its marginal social cost.
c. the marginal private benefit of firewood is less than its marginal social benefit.
d. the marginal private benefit of firewood exceeds its marginal social benefit.
2. If a negative externality prevails in a competitive market for air travel, then:
a. more than the efficient amount of annual air travel will be consumed in equilibrium.
b. less than the efficient amount of annual air travel will be consumed in equilibrium.
c. the marginal social cost of air travel will exceed its marginal social benefit in equilibrium.
d. both (a) and (c)
e. both (b) and (c)
3. A positive externality results from the purchase of smoke detectors. If smoke detectors are sold in a competitive market,
a. the marginal social benefit of smoke detectors is less than the marginal private benefit received by any consumer.
b. the marginal social benefit will exceed the marginal private benefit received by any consumer.
c. in equilibrium the marginal social cost of smoke detectors will equal the marginal social benefit.
d. in equilibrium the marginal social benefit of smoke detectors is zero.
4. The marginal external cost associated with air pollution increases with the annual output of a polluting industry. At the current competitive equilibrium level of output per year, the marginal external cost is $10 per unit of output. To achieve efficiency,
a. a corrective tax of $10 per unit of output is required.
b. a corrective tax of more than $10 per unit of output is required.
c. a corrective tax of less than $10 per unit of output is required.
d. a corrective subsidy of $10 per unit of output is required.
e. a corrective subsidy of less than $10 per unit of output is required
.
5. The marginal external cost associated with paper production is constant at $10 per ton per year. The competitive market equilibrium for paper production is currently 10 million tons per year. A corrective tax on paper production:
a. will collect $100 million annually.
b. will collect more than $100 million annually.
c. will collect less than $100 million annually.
d. will reduce annual damages to those other than buyers and sellers of paper to zero.
e. both (a) and (d)
6. The marginal external cost per unit of effluent discharged into a river by a perfectly competitive chemical industry is currently estimated to be $50 per ton per year. Which of the following statements is true?
a. Efficiency can be achieved with a $50 per ton annual effluent charge.
b. At the competitive equilibrium output, the marginal social benefit of discharging effluent is $50.
c. Efficiency can be achieved by banning discharge of effluent.
d. At the efficient output, the marginal social benefit of discharging effluent will be zero.
7. Electric power is produced by an unregulated monopoly in a certain region. The monopolistic electric power company’s production of electricity results in $10 per kilowatt hour of pollution damage to parties other than the buyers of electricity in the region. To achieve efficiency,
a. a $10 per kilowatt hour corrective tax is required.
b. more than $10 per kilowatt hour corrective tax is required.
c. a $10 corrective subsidy is required.
d. less than $10 per kilowatt hour corrective tax is required.
8. The competitive market equilibrium price of sanitation services in a small town with no government-supplied sanitation services is $2 per trash pickup. There is a $1 marginal external benefit associated with each trash pickup. The elasticity of supply of trash pickups is infinite in the long run, implying a horizontal supply curve. To achieve the efficient output of sanitation services,
a. a corrective subsidy must increase the price received by suppliers to $3 per pickup.
b. a corrective subsidy must decrease the price paid by consumers of sanitation services to $1 per pickup.
c. a corrective tax of $1 per pickup is required.
d. a corrective subsidy must increase the price paid by buyers to $3 per pickup.
9. The current competitive market price of fish is $3 per pound. A chemical producer emits effluent into a lake used by a commercial fishing firm. Each ton of chemical output causes a 20-pound reduction in the annual catch of the fishing firm. Assuming that transactions costs are zero and the chemical firm has the legal right to dump effluent into the lake,
a. the fishing firm would be willing to pay up to $60 per ton of chemicals per year to induce the chemical firm to reduce chemical output.
b. the fishing firm would be willing to pay up to $3 per ton of chemicals per year to induce the chemical firm to reduce chemical output.
c. the chemical firm would never consider the damage caused by its effluent.
d. government intervention is required to achieve efficiency.
10. According to the Coase theorem, externalities can be internalized when transactions costs are zero through:
a. corrective taxes and subsidies.
b. effluent fees.
c. assigning property rights to resource use but outlawing their exchange.
d. assignment of property rights to use resources and allowing free exchange of assigned property rights.
11. Which of the following is true if a negative externality is associated with the sale of gasoline?
a. Third parties other than the buyers and sellers of gasoline receive benefits.
b. Third parties other than the buyers and sellers of gasoline bear costs.
c. The marginal social cost of gasoline exceeds its marginal private cost.
d. both (b) and (c)
12. If a positive externality prevails in the market for smoke detectors, then when the market is in equilibrium,
a. the marginal social benefit of smoke detectors exceeds the marginal social cost.
b. the marginal social cost of smoke detectors exceeds the marginal social benefit.
c. the marginal social cost of smoke detectors is equal to the marginal social benefit.
d. more than the efficient amount of smoke detectors is sold.
13. Regulations require that emissions of carbon monoxide be limited to 1,000 tons per 100 square miles for all regions of the nation. If the marginal external cost of the emissions varies among regions in the nation, then the regulations will:
a. achieve the efficient amount of pollution abatement.
b. achieve more than the efficient amount of pollution abatement.
c. achieve less than the efficient amount of pollution abatement.
d. be likely to achieve more than the efficient amount of abatement in some regions, but less than the efficient amount in others.
14. If the marginal costs of reducing emissions varies among regions, then regulations requiring all regions in a nation to reduce emissions by the same amount will achieve:
a. the efficient amount of pollution abatement.
b. more than the efficient amount of pollution abatement.
c. less than the efficient amount of pollution abatement.
d. more than the efficient amount of pollution abatement in some regions, but less than the efficient amount in other regions.
15. Which of the following is true about command-and-control regulation that allows businesses to emit pollutants up to a certain point and bans emissions after that limit is reached?
a. They are equivalent to emissions charges.
b. They make firms pay the marginal cost of the damages done by their emissions, no matter what the level.
c. They allow firms to emit some pollutants at zero charge.
d. They are likely to minimize the cost of achieving any given reduction in emissions.
16. Assuming a product can be manufactured competitively without any externalities at an efficient quantity of 1,000 units and an efficient price of $100.00 per unit, what efficient quantity-price combination would be consistent with a negative externality?
a. 1,000 units, $95.00 per unit price.
b. 950 units, $102.00 per unit price.
c. 900 units, $90.00 per unit price.
d. 1,100 units, $105 per unit price.
17. The effect of a negative externality is similar to:
a. A supply curve (marginal social cost) shifting to the left.
b. A supply curve (marginal social benefit) shifting to the right.
c. A demand curve (marginal social cost) shifting to the left.
d. A demand curve (marginal social benefit) shifting to the right.
18. Assuming a product can be manufactured competitively without any externalities at an efficient quantity of 1,500 units and an efficient price of $50.00 per unit, what efficient quantity-price combination would be consistent with a positive externality?
a. 1,500 units, $60.00 per unit price.
b. 1,300 units, $45.00 per unit price.
c. 1,600 units, $40.00 per unit price.
d. 1,700 units, $56.00 per unit price.
19. The effect of a positive externality is similar to:
a. A supply curve (marginal social cost) shifting to the left.
b. A supply curve (marginal social benefit) shifting to the right.
c. A demand curve (marginal social cost) shifting to the left.
d. A demand curve (marginal social benefit) shifting to the right.
20. Assuming a product can be manufactured competitively without any externalities at an efficient quantity of 500 units and an efficient price of $150.00 per unit, what efficient quantity-price net subsidy combination would be consistent with a corrective subsidy for a positive externality?
a. 500 units, $150.00 per unit price net subsidy.
b. 300 units, $120.00 per unit price net subsidy.
c. 600 units, $160.00 per unit price net subsidy.
d. 700 units, $100.00 per unit price net subsidy.
ECO 450 Week 4 Quiz – Strayer
Chapter 4
Public Goods
True/False Questions
1. Bread is an example of a good that is nonrival in consumption.
2. A pure public good is one for which it is easy to exclude consumers from benefits if they refuse to pay.
3. The marginal social cost of producing another unit of a pure public good will always be positive.
4. To obtain a demand curve for a pure public good, the marginal benefit of each consumer must be summed for each possible quantity produced per time period.
5. If the efficient amount of a pure public good is produced, each person consumes it up to the point at which his or her marginal benefit equals the marginal social cost of the good.
6. In a Lindahl equilibrium, each consumer of a pure public good consumes the same quantity and pays a tax share per unit of the good equal to his or her marginal benefit.
7. If the marginal social cost of a pure public good exceeds its marginal social benefit, additional units of the good can still be financed by voluntary contributions.
8. The free-rider problem is less acute in small groups than it is in large groups.
9. A congestible public good is one for which the marginal cost of allowing an additional consumer to enjoy the benefits of a given quantity is always zero.
10. Television programming is a good example of a price-excludable public good.
11. It is possible to price a pure public good and sell it by the unit.
12. The demand curve for a pure public good is obtained by adding the quantities demanded by each individual consumer at each possible price.
13. A Lindahl equilibrium usually has each participant paying the same tax share per unit of a public good even though their marginal benefit of that unit varies.
14. Internet service is an example of a price-excludable public good.
15. Clubs are a means of providing congestible public goods through markets.
16. A common way to fund a public good is through a government that raises funds through taxation.
17. Private education is an example of a price-excludable public good.
18. A congestible good has no limits in how much it can be consumed.
Multiple Choice Questions
1. A pure public good is:
a. one that can easily be sold by the unit.
b. one that is nonrival in consumption.
c. one whose benefits are not subject to exclusion.
d. both (b) and (c)
2. The marginal cost of providing a certain quantity of a pure public good to an additional consumer after it is provided to any one consumer is:
a. zero.
b. positive and increasing.
c. positive and decreasing.
d. positive and constant.
3. The nonrival property of pure public goods implies that the:
a. benefits enjoyed by existing consumers decline as more consumers enjoy a given quantity of the good.
b. benefits enjoyed by existing consumers are unaffected as more consumers enjoy a given quantity of the good.
c. good cannot be priced.
d. marginal cost of producing the good is zero.
4. The demand curve for a pure public good is:
a. a horizontal line.
b. obtained by adding the quantities individual consumers would purchase at each possible price.
c. obtained by adding the marginal benefit obtained by each consumer at each possible quantity.
d. the marginal cost curve for the pure public good.
5. The efficient output of a pure public good is achieved at the point at which:
a. the marginal benefit obtained by each consumer equals the marginal social cost of producing the good.
b. the sum of the marginal benefits of all consumers equals the marginal social cost of producing the good.
c. the marginal benefit of each consumer equals zero.
d. the marginal social cost of producing the good is zero.
e. both (c) and (d)
6. The monthly rental rate for a satellite dish antenna is $200. The maximum marginal benefit that any resident of a condominium community will obtain per month from the antenna is $50. There are 100 residents in the community, none of whom values the antenna at less than $25 per month. Assuming that the antenna is a pure public good for residents of the community,
a. each resident of the community will rent his own antenna.
b. it is inefficient for the community to rent an antenna.
c. it is efficient for the members of the community to rent an antenna for their common use.
d. it is efficient for each resident to rent his own antenna.
7. In a Lindahl equilibrium,
a. each consumer purchases a pure public good up to the point at which his or her marginal benefit equals the marginal social cost of the good.
b. each person pays a tax per unit of the pure public good equal to his or her marginal benefit.
c. the sum of the marginal benefits of all consumers equals the marginal social cost of the good.
d. both (a) and (c)
e. both (b) and (c)
8. The free-rider problem:
a. becomes more serious as the number of persons involved in voluntarily financing a pure public good decreases.
b. becomes more serious as the number of persons involved in voluntarily financing a pure public good increases.
c. is independent of the number of persons involved in a scheme to voluntarily finance a pure public good.
d. does not prevent voluntary cooperation from efficiently providing pure public goods.
9. The marginal cost of making a given quantity of a congestible public good available to more consumers is:
a. always zero.
b. positive and increasing.
c. positive and decreasing.
d. zero at first but eventually becomes positive and increasing.
10. Cable TV programming is an example of a:
a. congestible public good.
b. price-excludable public good.
c. pure public good.
d. pure private good.
11. A major distinction between pure public goods and pure private goods is that:
a. pure private goods can easily be priced and sold in markets.
b. pure public goods can easily be divided into units.
c. pure public goods can only be collectively consumed.
d. both (a) and (c)
12. The principle of nonexclusion for pure public goods means that the benefits of the good:
a. are shared.
b. can be priced.
c. cannot be withheld from consumers even if they refuse to pay.
d. are not reduced to any one consumer when a given quantity is consumed by another.
13. Which of the following is true in a Lindahl equilibrium for cooperative supply of a pure public good?
a. The sum of the tax shares per unit paid by each consumer is equal to the marginal social cost of the public good.
b. The sum of the tax shares per unit paid by each consumer is equal to the marginal social benefit of the good.
c. The sum of the tax shares per unit paid by each consumer is maximized.
d. both (a) and (b)
14. Which of the following is a good example of a congestible public good?
a. TV programming
b. a road
c. a loaf of bread
d. homeland security
15. Education is:
a. a pure public good.
b. a pure private good.
c. a good that has characteristics of both public goods and private goods.
d. not subject to the exclusion principle.
16. An example of an undesirable public good (or public “bad”) is:
a. government.
b. private trash hauling.
c. poor air quality.
d. private property.
17. Public transportation is:
a. a congestible good.
b. a pure private good.
c. a good without limits to the number of consumers who desire to use it.
d. not subject to the exclusion principle.
18. A baseball field is:
a. a pure public good.
b. a pure private good.
c. a good that has characteristics of both public goods and private goods.
d. not subject to the exclusion principle.
19. A means of creating a price-excludable public good is:
a. allowing food and beverages when entering.
b. requiring costly tickets.
c. to fund through taxation.
d. requiring identification.
20. A free concert in a public arena is:
a. a non-congestible public good.
b. a good that can be consumed by all.
c. a private good.
d. subject to consumption limits.
Chapter 5
Public Choice and the Political Process
True/False Questions
1. A political equilibrium for a pure public good is generally independent of the collective choice rule used.
2. A voter’s most-preferred political outcome will change if, other things being equal, that person’s tax share per unit of the public good is changed.
3. A proposal is put forward to increase the number of police officers. You estimate that your marginal benefit from police protection just equals your tax per police officer at the number of officers that would constitute the police force if the proposal passes. You will therefore vote in favor of the proposal.
4. If all voters have the identical most-preferred political outcome, given their tax shares, then the political equilibrium under majority rule will be identical to the political equilibrium under unanimous consent.
5. The median voter is the one whose most-preferred political outcome is the median of the most-preferred outcome of all those voting.
6. If all voters have single-peaked preferences, a political equilibrium will not be possible under majority rule.
7. A person with multiple-peaked preferences is always made worse off as the quantity of a pure public good is increased, or decreased, once he or she attains his or her most-preferred political outcome.
8. Logrolling always succeeds in passing two paired issues that could not pass if voted on separately.
9. A bureaucrat who seeks to maximize the annual size of his budget each year will propose annual output levels corresponding to the amount for which MSB = MSC.
10. Political transactions costs are likely to be greater under unanimous consent than under majority rule.
11. Political externalities are likely to be negligible when collective choices are made under majority rule.
12. Unanimous consent is a collective choice rule that will protect the rights of minorities.
13. A person for whom the marginal benefit of a public good declines as more is made available has single-peaked preferences.
14. Cycling can occur in elections under majority rule if some voters have multiple-peaked preferences.
15. Special interest groups are more likely to gain income through the political process if they are a large percentage of the population.
16. A ration person’s most preferred political outcome is when the cost of the quantity of government-supplied goods is below the marginal benefit.
17. A budget-maximizing bureaucrat seeks funding levels where the total social cost equals the total social benefit.
18. Logrolling can allow more than one issue of minority interest to be passed.
Multiple Choice Questions
1. A community currently hires 10 security guards per week to patrol their neighborhood. Each security guard costs $300 per week. Assuming that the tax-sharing arrangement agreed to results in each of 300 voters paying the same tax share, each voter pays a weekly tax bill of:
a. $1.
b. $3.
c. $10.
d. $30.
2. A small community currently taxes residents to provide monthly community concerts. Voter A currently pays a tax per concert equal to $50 per month. This voter receives a marginal benefit of $75 at the current political equilibrium number of concerts per month. Voter A:
a. is the median voter.
b. would be made better off if the number of monthly concerts were increased.
c. would be made worse off if the number of monthly concerts were increased.
d. has achieved his most-preferred political outcome for monthly concerts.
3. A proposal to build new roads in a small town is up for a vote. Voter B estimates that his marginal benefit of roads at the proposed new level would be $80 per year. This voter will vote against the proposal:
a. no matter what her tax share.
b. if her tax share is $80.
c. if her tax share is less than $80.
d. if her tax share exceeds $80.
4. Currently eight security guards patrol a condominium community each week. The number of guards has been determined by majority rule. Each voter pays a tax share of $50 per guard. If Voter M is the median voter,
a. his marginal benefit from security guards is $50.
b. his marginal benefit exceeds that of any other voter.
c. the difference between his marginal benefit and $50 is at a maximum.
d. he would be made better off if more security guards were hired per week.
5. If all voters have single-peaked preferences, then under majority rule:
a. cycling of political outcomes can occur.
b. a political equilibrium exists.
c. the political equilibrium is the median most-preferred outcome.
d. both (b) and (c)
6. If a person has multiple-peaked preferences for a pure public good,
a. that person is always made worse off when moving away from his or her most-preferred political outcome.
b. that person will become worse off at first, but then become better off, when moving away from his or her most-preferred political equilibrium.
c. the marginal benefit of the pure public good always declines for that person as more is made available.
d. both (b) and (c)
7. Implicit logrolling results when:
a. any two issues are paired on a ballot.
b. two voters succeed in pairing two issues on a ballot that can pass together but would fail individually.
c. voters agree to trade votes on an issue.
d. the pairing of two issues on a ballot allows the achievement of efficiency.
8. Voter A will normally vote in favor of one security guard per week because his marginal benefit is $125 and his tax share is $100 per week. Voter A receives zero marginal benefit from one concert a week and would vote against it. Voter B receives $125 marginal benefit from one concert per week but no marginal benefit from one security guard. One concert per week also will fail to gain a majority when put to the vote. Assuming that both Voter A and Voter B will pay $100 per week in tax for each concert and each security guard,
a. they can both gain by engaging in logrolling on the two issues.
b. pairing the issues on one ballot will result in both Voter A and Voter B voting in favor of the combined issue.
c. pairing the issues on one ballot will result in both Voter A and Voter B voting against the combined issue.
d. implicit logrolling will result in Voter A voting in favor of the combined issue, but in Voter B voting against it.
9. A voter may choose not to vote in an election between two alternatives because:
a. he or she is indifferent between the two alternatives.
b. his or her probability of influencing the result is zero.
c. his or her most-preferred alternative is far from the two offered on the ballot.
d. all of the above
10. If bureaucrats seek to maximize the size of their budgets, they will:
a. seek to fund levels of services up to the point at which MSC = MSB.
b. seek to fund levels of services for which TSB > TSC.
c. seek to fund levels of services for which MSC > MSB.
d. both (b) and (c)
11. The demand curve for a pure public good is:
a. obtained by adding the quantity demanded at each possible price for all consumers.
b. obtained by summing the marginal benefits of each consumer for each possible quantity.
c. always upward sloping.
d. always a flat line.
12. A voter’s most-preferred political outcome will be that for which the:
a. marginal benefit of a pure public good is equal to the voter’s tax share per unit.
b. total benefit per unit of a pure public good is equal to the voter’s tax share per unit.
c. difference between the marginal benefit of a pure public good and the voter’s tax share per unit is maximized.
d. marginal benefit of a pure public good is equal to zero, no matter what the voter’s tax share per unit.
13. If all voters have single-peaked preferences for a pure public good, then the political equilibrium under majority rule:
a. cannot be defined.
b. is the median outcome.
c. is the median most-preferred outcome of all voter’s voting.
d. will not change if tax shares change.
14. Which of the following collective choice rules is likely to have the lowest political externalities?
a. two-thirds majority rule
b. simple majority rule
c. plurality rule
d. unanimous consent
15. Which of the following collective choice rules is likely to incur the highest political transactions costs?
a. two-thirds majority rule
b. simple majority rule
c. plurality rule
d. unanimous consent
16. If the marginal social benefit of one more unit of a good is 10 and the marginal social cost of one more unit of a good is 11, then:
a. the output of the good is efficient.
b. a bureaucrat can still increase the bureau’s budget.
c. a bureaucrat can increase the bureau’s budget if the total social cost exceeds the total social benefit.
d. a bureaucrat can increase the bureau’s budget if the total social cost is below the total social benefit.
17. The plurality rule is:
a. a collective bargaining rule.
b. a rule that is guaranteed to have majority decision.
c. a means of determining between only two possible outcomes.
d. a rule that cannot lead to a minority decision.
18. Arrow’s impossibility theorem states:
a. a unique political equilibrium for a public choice never exists.
b. a unique political equilibrium for a public choice cannot exist under majority rule.
c. a unique political equilibrium can exist if there is majority rule and multi-peaked preferences.
d. a unique political equilibrium for a public good cannot exist under unanimous consent.
19. Suppose tax shares are evenly distributed for a particular service at the amount of $100.00 per person. Which taxpayer suffers a political externality based on the taxpayer’s marginal benefit for the service?
a. Taxpayer A has a marginal benefit of $100.00.
b. Taxpayer B has a marginal benefit of $200.00.
c. Taxpayer C has a marginal benefit of $90.00.
d. Taxpayers B and C.
20. A public choice is:
a. free of any political interaction or process.
b. by majority rule only.
c. one made through political interaction of many people according to established rules.
d. by unanimous consent only.
Chapter 6
Cost-Benefit Analysis and Government Investments
True/False Questions
1. A cost-effective program mix is one that accomplishes a given mission at minimum cost.
2. Cost-benefit analysis is a technique for determining the net benefits of alternative government projects.
3. An increase in the profits of gasoline dealers on an improved road is a benefit of the road project.
4. If increases in agricultural land values are viewed as a benefit of an irrigation project, then the market value of projected increased crops should also be included as a benefit of the project.
5. The social rate of discount must equal the opportunity cost of funds used to finance a project.
6. If a project has a B/C ratio of 0.9, its approval will result in net benefits to citizens of the nation.
7. The benefits of widening a road consist only of the cost savings to existing users of the road.
8. If the benefits of a new bridge exceed the costs, then there will be a net social gain from building the bridge.
9. If the marginal social cost of a new road exceeds its marginal social benefit, then building the road will result in a net social gain.
10. The higher the social rate of discount, the more government projects for which benefits will exceed costs.
11. A lower discount rate favors more capital-intensive investments that yield net benefits further into the future.
12. The present value of a stream of net benefits for 20 years will be less than the sum of those benefits unless the social rate of discount is zero.
13. Building a new sports stadium results in food sales at the facility. These food sales should be considered a benefit of the new stadium.
14. Program budgeting seeks to group agencies with similar purposes for budgeting, independent of the government department to which they belong.
15. Cost-benefit analysis can be viewed as a way of minimizing the cost of any given government output.
16. Assuming costs are paid immediately, an increase in the social discount rate will lower the benefit-cost rate.
17. The marginal rate of technical substitution (where the slope of the isocost and isoquant lines are equal) is the ratio of the prices of the two goods.
18. The marginal rate of technical substitution is the slope of the isoquant line.
Multiple Choice Questions
1. In program budgeting, an agency’s program is:
a. its mission.
b. a combination of government activities designed to produce a distinguishable output.
c. its output.
d. the cost of its output.
2. Program budgeting differs from line budgeting in that:
a. all agencies with similar missions are budgeted for together, irrespective of the government department to which they belong.
b. proposed expenditures in a given government department are compared only with other programs in the same department.
c. a computer program is used.
d. the effect of programs on the distribution of income is explicitly considered.
3. The mission of a government agency is:
a. its program.
b. its output.
c. its cost.
d. a measure of the inputs it uses.
4. Assuming a full-employment economy, which of the following should not be included as a benefit of a government project to build a new highway when doing a cost-benefit analysis?
a. the income of construction workers employed to build the highway
b. the value of the time saved on trips between points to be served by the new highway
c. the increase in retail sales at sites bordering the highway
d. both (a) and (c)
5. A cost-benefit analysis of an irrigation project shows that the ratio of the discounted present value of benefits to costs is less than one. This implies that:
a. the net benefit of the project is positive.
b. the net benefit of the project is negative.
c. efficiency can be attained by undertaking the project.
d. the project will redistribute income to the poor.
6. The social rate of discount is currently 10 percent. This implies that:
a. all government projects will yield a 10-percent return.
b. the opportunity cost of funds for all government projects is 10 percent.
c. more capital-intensive projects will be ranked over less capital-intensive projects.
d. the opportunity cost of funds for all government projects is 20 percent.
7. The social rate of discount used in cost-benefit analysis measures the:
a. benefits of a project.
b. cost of a project.
c. rate of return on the project.
d. opportunity cost of displaced private saving or investment.
8. Suppose that a business investment is subject to a 50-percent tax but that the return to private savings is not taxed. The after-tax rate of return on business investment is currently 9 percent. If a proposed government project is predicted to displace business investment, then the social rate of discount is:
a. 9 percent.
b. 18 percent.
c. 36 percent.
d. infinite.
9. A proposed road improvement project is expected to increase pollution in an urban area. The pollution damage should:
a. be considered a cost of the project.
b. be considered a benefit of the project.
c. not be considered in evaluation of the project.
d. be used as a justification to increase the social rate of discount.
10. A new road will lower the cost of a trip between two cities from $20 to $10. Currently, 100,000 trips per year are made between the two points. The benefit of the new road will:
a. be $1 million per year.
b. exceed $1 million per year.
c. be less than $1 million per year.
d. accrue only to current users.
11. Program budgeting is a way to:
a. minimize the cost of producing a given amount of government services.
b. rank projects according to their marginal net benefits.
c. maximize the output of government.
d. increase government spending.
12. Cost-benefit analysis is a way to:
a. minimize the cost of producing a given amount of government services.
b. rank projects according to their marginal net benefits.
c. maximize the output of government.
d. increase government spending.
13. If the social rate of discount falls, then the efficient amount of government capital spending will:
a. increase.
b. decrease.
c. be unaffected.
d. fall to zero.
14. A government agency has a new hydroelectric project that will take 15 years to build before it provides any benefits. The net present value of the project will be highest under which of the following discount rates?
a. 0 percent
b. 1 percent
c. 3 percent
d. 5 percent
15. Which of the following techniques is used by economists to value years of life saved by a highway safety program?
a. measuring the increased income that it allows
b. trying to get those affected by the improved safety to reveal their willingness to pay for the reduced risk of death
c. either (a) or (b)
d. none of the above, because economists believe that it is impossible to put a value on life
16. If the quantity of good A is on the vertical axis and the quantity of good B is on the horizontal axis, the slope of the corresponding isocost line is:
a. the price of good B divided by the price of good A.
b. the negative of the price of good B divided by the price of good A.
c. the price of good A divided by the price of good B.
d. the negative of the price of good A divided by the price of good B.
17. If the quantity of good A is on the vertical axis and the quantity of good B is on the horizontal axis, the marginal rate of technical substitution of the corresponding isoquant line is:
a. the marginal product of good B divided by the marginal product of good A.
b. the negative of the marginal product of good B divided by the marginal product of good A.
c. the marginal product of good A divided by the marginal product of good B.
d. the negative of the marginal product of good A divided by the marginal product of good B.
18. If the quantity of good A is on the vertical axis and the quantity of good B is on the horizontal axis, then the cost-effective mix between the two goods occurs when:
a. the slope of the associated isoquant line equals the price of A divided by the price of B.
b. the marginal rate of technical substitution equals the price of A divided by the price of B.
c. the marginal rate of technical substitution equals the price of B divided by the price of A.
d. either (a) or (c).
19. The process of taking a previous period’s budget and making minor changes to produce the current year’s budget is called:
a. zero based budgeting.
b. enumerated budgeting.
c. developmental budgeting.
d. incremental budgeting.
20. The nominal interest rate is:
a. the real rate of interest when there is inflation.
b. less than the real rate of interest when there is inflation.
c. inflation adjusted.
d. not adjusted by inflation.
Chapter 7
Government Subsidies and Income Support for the Poor
True/False Questions
1. The poverty threshold is independent of the size of a family and the age of a household head.
2. �� The rate of poverty has increased in the United States since 1959.
3. In calculating the official poverty rate, cash transfers to the poor are included in their income, but in-kind transfers are not.
4. All persons in the United States with income below the poverty level are eligible for TANF or for SSI transfers designed to assist the poor.
5. The cash benefit and eligibility for payments under TANF varies considerably from state to state.
6. Cash transfers currently account for much less of the total transfers to the poor than in-kind transfers do.
7. Medicaid is likely to result in incentives for recipients to consume medical services up to a point at which the marginal social cost of such services exceeds their marginal benefit.
8. Supplemental Nutrition Assistance (formerly called food stamps) lower the price of food to recipients.
9. A person receiving a lump-sum annual transfer is likely to work less than would otherwise be the case.
10. The annual income guarantee under a negative income tax is $10,000 per family of four.This transfer declines by 50 cents for each dollar of annual earnings.The transfer received by a family of four will decline to zero when its annual earnings is $20,000.
11. The Earned Income Tax Credit (EITC) is a way of subsidizing those who are unable to work and have no earnings.
12. The Earned Income Tax Credit (EITC) is a form of wage-rate subsidy that increases the incomes of low-income people with earnings.
13. The Earned Income Tax Credit (EITC) is a form of negative tax that increases the incomes of workers with earnings but is eventually phased out to zero as earnings rise above a certain level.
14. Medicaid is jointly financed by the federal government and the state governments in the United States and now absorbs more than 20 percent of state government budgets.
15. Since TANF has been introduced in the United States, welfare caseloads have declined and labor force participation of less-skilled single mothers has increased.
16. A two-person household headed by a person over 65 is classified as poor at the same level as a two-person household not headed by an elderly person.
17. The poverty threshold stays constant from year to year.
18. Less than one-third of the people classified as poor in the United States are children.
Multiple Choice Questions
1. In the United States, the poverty threshold is:
a. the same for all households of a given size independent of the age of the household head.
b. the cost of a minimally accepted diet for persons in the family.
c. three times the cost of a minimally accepted diet for persons in the family, for families with household heads under the age of 65.
d. five times the cost of a minimally accepted diet for persons in the family, for families with household heads under the age of 65.
2. Government transfers to the poor in the United States:
a. are always in the form of cash.
b. are available to all persons whose income is below the poverty threshold.
c. succeed in eliminating poverty in the United States.
d. are available only to poor persons who fall into certain demographic categories.
3. The most expensive program of assistance to the poor in the United States in recent years has been:
a. TANF.
b. Supplemental Nutrition Assistance (formerly called food stamps).
c. Medicaid.
d. public housing.
4. Cash transfers are:
a. the dominant method of providing assistance to the poor in the United States.
b. included in the income of recipients when calculating the official poverty rate.
c. available only to the elderly in the United States.
d. both (a) and (b)
5. If the supply of medical services is perfectly elastic, then the effect of Medicaid is to:
a. increase the market price of medical services.
b. result in the efficient amount of medical services.
c. cause recipients to consume medical services beyond the point at which their marginal benefits per year equal the marginal social costs of medical services.
d. both (a) and (c)
6. The Supplemental Nutrition Assistance (formerly called food stamps):
a. reduces the market price of food to those eligible for Supplemental Nutrition Assistance.
b. is likely to increase the market price of food to all consumers.
c. is likely to increase food purchases by recipients but not other purchases.
d. is likely to increase both food and nonfood purchases by recipients.
7. The value of a price-distorting subsidy for a three-bedroom apartment is $100 per month.This means that the person choosing to live in an apartment of that size would have to pay an extra $100 per month at the market rent. Then it follows that:
a. that person would be worse off if she received a cash subsidy of $100 per month.
b. that person would be better off if she received a cash subsidy of $100 per month.
c. that person would be just as well off if she received a cash subsidy of less than $100 per month.
d. both (b) and (c)
8. Suppose a welfare recipient is given a cash grant that increases his monthly income.That grant will never be taken away no matter how much the recipient earns.The grant will result in a(n):
a. substitution effect favorable to work.
b. substitution effect unfavorable to work.
c. income effect favorable to work.
d. income effect unfavorable to work.
9. A welfare recipient receives a cash transfer of $100 per week.This grant is not reduced if the recipient earns less than $20 per week.However, after the recipient earns more than $20 per week, the grant is reduced by 66 cents for each dollar of earnings.The cash transfer will be reduced to zero if the recipient earns:
a. $151.52 per week.
b. $171.52 per week.
c. $131.52 per week.
d. $100.00 per week.
10. An income guarantee of $10,000 per year for all families is established with a phase-out rate of benefits of 50 cents per dollar of earnings. Then it follows that:
a. only families with earnings of less than $10,000 per year will receive transfers.
b. all families with earnings of less than $20,000 per year will receive transfers.
c. all families with income of less than $30,000 per year will receive transfers.
d. all families will receive transfers.
11. The Earned Income Tax Credit (EITC) is:
a. a transfer to low-income people who are unable to work.
b. a flat grant that increases by $4,000 the income of all workers below the poverty level.
c. a subsidy to the poor who have low earnings that increases as they earn more, reaches a maximum, and then is phased out to zero as earnings increase above a certain maximum.
d. available to all persons whose incomes are below the poverty level, whether they work or not.
12. The Earned Income Tax Credit (EITC):
a. is a negative tax that transfers income to the poor who have earnings.
b. can increase the incomes of those eligible by as much as 40 percent.
c. is never phased out as the earnings of the recipients increase.
d.both (a) and (b)
13. Which of the following is true about Temporary Assistance to Needy Families (TANF)?
a. It is an entitlement program administered by the federal government.
b. It provides temporary and limited support for poor families through federal grants to state governments.
c. State governmentsdetermine eligibility for its benefits and administer it.
d. both (b) and (c)
14. Under Temporary Assistance to Needy Families (TANF),
a. federal spending is capped and is allocated to states as a block grant.
b. federal spending is an open-ended entitlement program that requires federal payments to all eligible recipients who meet means and status tests.
c. the states do not determine eligibility and benefit levels; instead, the federal government sets these levels as national standards.
d. recipients are not required to work and will receive benefits as long as they meet a means test.
15. Which of the following is true about the Medicaid program in the United States?
a. It is entirely financed by the federal government.
b. It is a means-tested entitlement program that mandates payment for medical services, mainly to those with low incomes.
c. It is jointly financed by the federal and state governments and is absorbing a significant share of the state government budgets.
d. both (b) and (c)
16. In the United Stated, which of the following years had the highest poverty rate?
a. 2000
b. 1993
c. 1980
d. 1873
17. Temporary Assistance to Needy Families (TANF) replaced:
a. no existing programs.
b. one existing program.
c. two existing programs.
d. three existing programs.
18. Medicaid was enacted by Congress in:
a. 1965.
b. 1972.
c. 1977.
d. 1980.
19. Why rely on the government to aid the poor rather than private charities?
a. The government can establish uniform standards for eligibility.
b. Voluntary donations will most likely be inadequate.
c. The government will most likely be able to meet all needs to the satisfaction of all citizens.
d. both (a) and (b)
20. An EITC program is more likely to encourage working when compared to NIT program because:
a. participants are guaranteed income even if they are not working.
b. participants must work to receive benefits.
c. participants are eligible for work training.
d. participants receive a wage rate subsidy.
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ECO 410 Week 5 Quiz – Strayer
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Week 5 Quiz 4 Chapter 7 and 8
Chapter 7
International Parity Conditions
7.1 Prices and Exchange Rates
Multiple Choice
1) If an identical product can be sold in two different markets, and no restrictions exist on the sale or transportation costs, the product's price should be the same in both markets. This is known as:
A) relative purchasing power parity.
B) interest rate parity.
C) the law of one price.
D) equilibrium.
2) The Economist publishes annually the "Big Mac Index" by which they compare the prices of the McDonald's Corporation's Big Mac hamburger around the world. The index estimates the exchange rates for currencies based on the assumption that the burgers in question are the same across the world and therefore, the price should be the same. If a Big Mac costs $2.54 in the United States and 294 yen in Japan, what is the estimated exchange rate of yen per dollar as hypothesized by the Hamburger index?
A) $0.0086/¥
B) ¥124/$
C) $0.0081/¥
D) ¥115.75/$
3) If the current exchange rate is 113 Japanese yen per U.S. dollar, the price of a Big Mac hamburger in the United States is $3.41, and the price of a Big Mac hamburger in Japan is 280 yen, then other things equal, the Big Mac hamburger in Japan is:
A) correctly priced.
B) under priced.
C) over priced.
D) There is not enough information to determine if the price is appropriate or not.
4) The price of a Big Mac in the U.S. is $3.41 and the price in Mexico is Peso 29.0. What is the implied PPP of the Peso per dollar?
A) Peso 8.50/$1
B) Peso 10.8/$1
C) Peso 11.76/$1
D) None of the above
5) Assume the implied PPP rate of exchange of Mexican Pesos per U.S. dollar is 8.50 according to the Big Mac Index. Further, assume the current exchange rate is Peso 10.80/$1. Thus, according to PPP and the Law of One Price, at the current exchange rate the peso is:
A) overvalued.
B) undervalued.
C) correctly valued.
D) There is not enough information to answer this question.
6) According to the Big Mac Index, the implied PPP exchange rate is Mexican peso 8.50/$1 but the actual exchange rate is peso10.80/$1. Thus, at current exchange rates the peso appears to be ________ by ________.
A) overvalued; approximately 21%
B) overvalued; approximately 27%
C) undervalued; approximately 21%
D) undervalued; approximately 27%
7) Other things equal, and assuming efficient markets, if a Honda Accord costs $24,682 in the U.S., then at an exchange rate of $1.57/£, the Honda Accord should cost ________ in Great Britain.
A) £24,682
B) £38,751
C) £10,795
D) £15,721
8) One year ago the spot rate of U.S. dollars for Canadian dollars was $1/C$1. Since that time the rate of inflation in the U.S. has been 4% greater than that in Canada. Based on the theory of Relative PPP, the current spot exchange rate of U.S. dollars for Canadian dollars should be approximately:
A) $0.96/C$
B) $1/C$
C) $1.04/C$
D) Relative PPP provides no guide for this type of question.
9) ________ states that differential rates of inflation between two countries tend to be offset over time by an equal but opposite change in the spot exchange rate.
A) The Fisher Effect
B) The International Fisher Effect
C) Absolute Purchasing Power Parity
D) Relative Purchasing Power Parity
10) Two general conclusions can be made from the empirical tests of purchasing power parity (PPP):
A) PPP holds up well over the short run but poorly for the long run, and the theory holds better for countries with relatively low rates of inflation.
B) PPP holds up well over the short run but poorly for the long run, and the theory holds better for countries with relatively high rates of inflation.
C) PPP holds up well over the long run but poorly for the short run, and the theory holds better for countries with relatively low rates of inflation.
D) PPP holds up well over the long run but poorly for the short run, and the theory holds better for countries with relatively high rates of inflation.
11) A country's currency that strengthened relative to another country's currency by more than that justified by the differential in inflation is said to be ________ in terms of PPP.
A) overvalued
B) over compensating
C) undervalued
D) under compensating
12) If we set the real effective exchange rate index between Canada and the United States equal to 100 in 1998, and find that the U.S. dollar has risen to a value of 112.6, then from a competitive perspective the U.S. dollar is:
A) overvalued.
B) undervalued.
C) very competitive.
D) There is not enough information to answer this question.
13) If we set the real effective exchange rate index between the United Kingdom and the United States equal to 100 in 2005, and find that the U.S. dollar has changed to a value of 91.4, then from a competitive perspective the U.S. dollar is:
A) overvalued.
B) undervalued.
C) equally valued.
D) There is not enough information to answer this question.
14) The government just released international exchange rate statistics and reported that the real effective exchange rate index for the U.S. dollar vs the Japanese yen decreased from 105 last year to 95 currently and is expected to fall still further in the coming year. Other things equal U.S. ________ to/from Japan think this is good news and U.S. ________ to/from Japan think this is bad news.
A) importers; exporters
B) importers; importers
C) exporters; exporters
D) exporters; importers
True/False
1) If a market basket of goods cost $100 is the US and €70 in France, then the PPP exchange rate would be $.70/€.
2) The assumptions for relative PPP are more rigid than the assumptions for absolute PPP.
3) Empirical tests prove that PPP is an accurate predictor of future exchange rates.
4) Consider the price elasticity of demand. If a product has price elasticity less than one it is considered to have relatively elastic demand.
Essay
1) The authors state that empirical tests of purchasing power parity "have, for the most part, not proved PPP to be accurate in predicting future exchange rates." The authors then state that PPP does hold up reasonably well in two situations. What are some reasons why PPP does not accurately predict future exchange rates, and under what conditions might we reasonably expect PPP to hold?
7.2 Exchange Rate Pass-Through
Multiple Choice
1) ________ states that nominal interest rates in each country are equal to the required real rate of return plus compensation for expected inflation.
A) Absolute PPP
B) Relative PPP
C) The Law of One Price
D) The Fisher Effect
2) In its approximate form the Fisher effect may be written as ________. Where: i = the nominal rate of interest, r = the real rate of return and π = the expected rate of inflation.
A) i = (r)(π)
B) i = r + π + (r)(π)
C) i = r + π
D) i = r + 2π
3) Assume a nominal interest rate on one-year U.S. Treasury Bills of 2.60% and a real rate of interest of 1.00%. Using the Fisher Effect Equation, what is the approximate expected rate of inflation in the U.S. over the next year?
A) 2.10%
B) 2.05%
C) 1.60%
D) 1.00%
4) Assume a nominal interest rate on one-year U.S. Treasury Bills of 3.80% and a real rate of interest of 2.00%. Using the Fisher Effect Equation, what is the exact expected rate of inflation in the U.S. over the next year?
A) 1.84%
B) 1.80%
C) 1.76%
D) 1.72%
5) The relationship between the percentage change in the spot exchange rate over time and the differential between comparable interest rates in different national capital markets is known as:
A) absolute PPP.
B) the law of one price.
C) relative PPP.
D) the international Fisher Effect.
6) According to the international Fisher Effect, if an investor purchases a five-year U.S. bond that has an annual interest rate of 5% rather than a comparable British bond that has an annual interest rate of 6%, then the investor must be expecting the ________ to ________ at a rate of at least 1% per year over the next 5 years.
A) British pound; appreciate
B) British pound; revalue
C) U.S. dollar; appreciate
D) U.S. dollar; depreciate
7) ________ states that the spot exchange rate should change in an equal amount but in the opposite direction to the difference in interest rates between two countries.
A) Fisher-open
B) Fisher-closed
C) The Fisher Effect
D) none of the above
8) Exchange rate pass-through may be defined as:
A) the bid/ask spread on currency exchange rate transactions.
B) the degree to which the prices of imported and exported goods change as a result of exchange rate changes.
C) the PPP of lesser-developed countries.
D) the practice by Great Britain of maintaining the relative strength of the currencies of the Commonwealth countries under the current floating exchange rate regime.
9) Phillips NV produces DVD players and exports them to the United States. Last year the exchange rate was $1.25/euro and Plillips charged 120 euro per player in Euroland and $150 per DVD player in the United States. Currently the spot exchange rate is $1.45/euro and Phillips is charging $160 per DVD player. What is the degree of pass through by Phillips NV on their DVD players?
A) 92%
B) 33.3%
C) 41.7%
D) 4.1%
10) Jaguar has full manufacturing costs of their S-type sedan of £22,803. They sell the S-type in the UK with a 20% margin for a price of £27,363. Today these cars are available in the US for $55,000 which is the UK price multiplied by the current exchange rate of $2.01/£. Jaguar has committed to keeping the US price at $55,000 for the next six months. If the UK pound appreciates against the USD to an exchange rate of $2.15/£, and Jaguar has not hedged against currency changes, what is the amount the company will receive in pounds at the new exchange rate?
A) £22,803
B) £25,581
C) £27,363
D) £55,000
11) Jaguar has full manufacturing costs of their S-type sedan of £22,803. They sell the S-type in the UK with a 20% margin for a price of £27,363. Today these cars are available in the US for $55,000 which is the UK price multiplied by the current exchange rate of $2.01/£. Jaguar has committed to keeping the US price at $55,000 for the next six months. If the UK pound appreciates against the USD to an exchange rate of $2.15/£, and Jaguar has not hedged against currency changes, what is the percentage margin the company will realize given the new exchange rate?
A) 20.0%
B) 15.3%
C) 12.4%
D) 7.2%
12) The price elasticity of demand for DVD players manufactured by Sony of Japan is greater than one. If the Japanese yen appreciates against the U.S. dollar by 10% and the price of the Sony DVD players in the U.S also rises by 10%, then other things equal, the total dollar sales revenues of Sony DVDs would:
A) decline.
B) increase.
C) stay the same.
D) insufficient information
True/False
1) The final component of the equation for the Fisher Effect, (r)(π), where r = the real rate of return and π = the expected rate of inflation, is often dropped from the equation because the number is simply too large for most Western economies.
2) Empirical studies show that the Fisher Effect works best for short-term securities.
3) The current U.S. dollar-yen spot rate is ¥125/$. If the 90-day forward exchange rate is ¥127/$ then the yen is at a forward premium.
4) The premium or discount on forward currency exchange rates between any two countries is visually obvious when you plot the interest rates of each country on the same yield curve. The currency of the country with the higher yield curve should be selling at a forward discount.
5) Use interest rate parity to answer this question. A U.S. investor has a choice between a risk-free one-year U.S. security with an annual return of 4%, and a comparable British security with a return of 5%. If the spot rate is $1.43/£, the forward rate is $1.44/£, and there are no transaction costs, the investor should invest in the U.S. security.
6) Both covered and uncovered interest arbitrage are risky operations in the sense that even without default in the securities, the returns are unknown until all transactions are complete.
7) All that is required for a covered interest arbitrage profit is for interest rate parity to not hold.
Essay/Short Answer
1) The authors describe an application of uncovered interest arbitrage (UIA) known as "yen carry trade." Define UIA and describe the example of yen carry trade. Why would an investor engage in the practice of yen carry trade and is there any risk of loss or lesser profit from this investment strategy?
2) The Fisher Effect is a familiar economic theory in the domestic market. In words, define the Fisher Effect and explain why you think it is also appropriately applied to international markets.
7.3 The Forward Rate
Multiple Choice
1) If the forward rate is an unbiased predictor of the expected spot rate, which of the following is NOT true?
A) The expected value of the future spot rate at time 2 equals the present forward rate for time 2 delivery, available now.
B) The distribution of possible actual spot rates in the future is centered on the forward rate.
C) The future spot rate will actually be equal to what the forward rate predicts.
D) All of the above are true.
2) Which of the following is NOT an assumption of market efficiency?
A) Instruments denominated in other currencies are perfect substitutes for one another.
B) Transaction costs are low or nonexistent.
C) All relevant information is quickly reflected in both spot and forward exchange markets.
D) All of the above are true.
3) Empirical tests have yielded ________ evidence about market efficiency with a general consensus that developing foreign markets are ________.
A) conflicting; not efficient
B) conflicting; efficient
C) consistent; inefficient
D) none of the above
4) A ________ is an exchange rate quoted today for settlement at some time in the future.
A) spot rate
B) forward rate
C) currency rate
D) yield curve
5) Assume the current U.S. dollar-British spot rate is 0.6993£/$. If the current nominal one-year interest rate in the U.S. is 5% and the comparable rate in Britain is 6%, what is the approximate forward exchange rate for 360 days?
A) £1.42/$
B) £1.43/$
C) £0.6993/$
D) £0.7060/$
6) Assume the current U.S. dollar-yen spot rate is 90 ¥/$. Further, the current nominal 180-day rate of return in Japan is 1% and 2% in the United States. What is the approximate forward exchange rate for 180 days?
A) ¥89.12/$
B) ¥89.55/$
C) ¥90.89/$
D) ¥90.45/$
7) The current U.S. dollar-yen spot rate is 125¥/$. If the 90-day forward exchange rate is 127 ¥/$ then the yen is selling at a per annum ________ of ________.
A) premium; 1.57%
B) premium; 6.30%
C) discount; 1.57%
D) discount; 6.30%
8) The theory of ________ states that the difference in the national interest rates for securities of similar risk and maturity should be equal to but opposite in sign to the forward rate discount or premium for the foreign currency, except for transaction costs.
A) international Fisher Effect
B) absolute PPP
C) interest rate parity
D) the law of one price
9) With covered interest arbitrage:
A) the market must be out of equilibrium.
B) a "riskless" arbitrage opportunity exists.
C) the arbitrageur trades in both the spot and future currency exchange markets.
D) all of the above
10) Covered interest arbitrage moves the market ________ equilibrium because ________.
A) toward; purchasing a currency on the spot market and selling in the forward market narrows the differential between the two
B) toward; investors are now more willing to invest in risky securities
C) away from; purchasing a currency on the spot market and selling in the forward market increases the differential between the two
D) away from; demand for the stronger currency forces up interest rates on the weaker security
True/False
1) If exchange markets were not efficient, it would pay for a firm to spend resources on forecasting exchange rates.
2) If the forward exchange rate is an unbiased predictor of future spot rates, then future spot rates will always be equal to current forward rates.
3) COVERED interest arbitrage (CIA), is where investors borrow in countries and currencies exhibiting relatively low interest rates and convert the proceeds into currencies that offer much higher interest rates. The transaction is "covered," because the investor does not sell the higher yielding currency proceeds forward.
7.4 Prices, Interest Rates, and Exchange Rates in Equilibrium
Multiple Choice
1) According to the International Fisher Effect, the forecast change in the spot rate between two countries is equal to:
A) the current spot rate multiplied by the ratio of the inflation rates in the respective countries.
B) but the opposite sign to the difference between nominal interest rates.
C) but the opposite sign to the difference between inflation rates.
D) but the opposite sign to the difference between real interest rates.
True/False
1) In their approximate form, PPP, IRP, and forward rates as an unbiased predictor of the future spot rate lead to similar forecasts of the future spot rate.
Multinational Business Finance, 13e (Eiteman/Stonehill/Moffett)
Chapter 8 Foreign Currency Derivatives and Swaps
8.1 Foreign Currency Futures
Multiple Choice
1) Financial derivatives are powerful tools that can be used by management for purposes of:
A) speculation.
B) hedging.
C) human resource management.
D) A and B above
2) A foreign currency ________ contract calls for the future delivery of a standard amount of foreign exchange at a fixed time, place, and price.
A) futures
B) forward
C) option
D) swap
3) Which of the following is NOT a contract specification for currency futures trading on an organized exchange?
A) size of the contract
B) maturity date
C) last trading day
D) All of the above are specified.
4) About ________ of all futures contracts are settled by physical delivery of foreign exchange between buyer and seller.
A) 0%
B) 5%
C) 50%
D) 95%
5) Futures contracts require that the purchaser deposit an initial sum as collateral. This deposit is called a:
A) collateralized deposit.
B) marked market sum.
C) margin.
D) settlement.
6) A speculator in the futures market wishing to lock in a price at which they could ________ a foreign currency will ________ a futures contract.
A) buy; sell
B) sell; buy
C) buy; buy
D) none of the above
7) A speculator that has ________ a futures contract has taken a ________ position.
A) sold; long
B) purchased; short
C) sold; short
D) purchased; sold
8) Peter Simpson thinks that the U.K. pound will cost $1.43/£ in six months. A 6-month currency futures contract is available today at a rate of $1.44/£. If Peter was to speculate in the currency futures market, and his expectations are correct, which of the following strategies would earn him a profit?
A) Sell a pound currency futures contract.
B) Buy a pound currency futures contract.
C) Sell pounds today.
D) Sell pounds in six months.
9) Jack Hemmings bought a 3-month British pound futures contract for $1.4400/£ only to see the dollar appreciate to a value of $1.4250 at which time he sold the pound futures. If each pound futures contract is for an amount of £62,500, how much money did Jack gain or lose from his speculation with pound futures?
A) $937.50 loss
B) $937.50 gain
C) £937.50 loss
D) £937.50 gain
10) Which of the following statements regarding currency futures contracts and forward contracts is NOT true?
A) A futures contract is a standardized amount per currency whereas the forward contact is for any size desired.
B) A futures contract is for a fixed maturity whereas the forward contract is for any maturity you like up to one year.
C) Futures contracts trade on organized exchanges whereas forwards take place between individuals and banks with other banks via telecom linkages.
D) All of the above are true.
11) Which of the following is NOT a difference between a currency futures contract and a forward contract?
A) The futures contract is marked to market daily, whereas the forward contract is only due to be settled at maturity.
B) The counterparty to the futures participant is unknown with the clearinghouse stepping into each transaction, whereas the forward contract participants are in direct contact setting the forward specifications.
C) A single sales commission covers both the purchase and sale of a futures contract, whereas there is no specific sales commission with a forward contract because banks earn a profit through the bid-ask spread.
D) All of the above are true.
12) A foreign currency ________ gives the purchaser the right, not the obligation, to buy a given amount of foreign exchange at a fixed price per unit for a specified period.
A) future
B) forward
C) option
D) swap
13) A foreign currency ________ option gives the holder the right to ________ a foreign currency, whereas a foreign currency ________ option gives the holder the right to ________ an option.
A) call, buy, put, sell
B) call, sell, put, buy
C) put, hold, call, release
D) none of the above
14) The price at which an option can be exercised is called the:
A) premium.
B) spot rate.
C) strike price.
D) commission.
15) An ________ option can be exercised only on its expiration date, whereas a/an ________ option can be exercised anytime between the date of writing up to and including the exercise date.
A) American; European
B) American; British
C) Asian; American
D) European; American
16) An ________ option can be exercised only on its expiration date, whereas a/an ________ option can be exercised anytime between the date of writing up to and including the exercise date.
A) American; European
B) American; British
C) Asian; American
D) European; American
17) A call option whose exercise price exceeds the spot price is said to be:
A) in-the-money.
B) at-the-money.
C) out-of-the-money.
D) over-the-spot.
18) A call option whose exercise price is less than the spot price is said to be:
A) in-the-money.
B) at-the-money.
C) out-of-the-money.
D) under-the-spot.
19) An option whose exercise price is equal to the spot rate is said to be:
A) in-the-money.
B) at-the-money.
C) out-of-the-money.
D) on-the-spot.
20) The main advantage(s) of over-the-counter foreign currency options over exchange traded options is (are):
A) expiration dates tailored to the needs of the client.
B) amounts that are tailor made.
C) client desired expiration dates.
D) all of the above
21) As a general statement, it is safe to say that businesses generally use the ________ for foreign currency option contracts, and individuals and financial institutions typically use the ________.
A) exchange markets; over-the-counter
B) over-the-counter; exchange markets
C) private; government sponsored
D) government sponsored; private
TABLE 8.1
Use the table to answer following question(s).
April 19, 2009, British Pound Option Prices (cents per pound, 62,500 pound contracts).
22) Refer to Table 8.1. What was the closing price of the British pound on April 18, 2009?
A) $1.448/£
B) £1.448/$
C) $14.48/£
D) none of the above
23) Refer to Table 8.1. The exercise price of ________ giving the purchaser the right to sell pounds in June has a cost per pound of ________ for a total price of ________.
A) 1460; 0.68 cents; $425.00
B) 1440; 1.06 cents; $662.50
C) 1450; 1.02 cents; $637.50
D) 1440; 1.42 cents; $887.50
24) Refer to Table 8.1. The May call option on pounds with a strike price of 1440 mean:
A) $88/£ per contract.
B) $0.88/£.
C) $0.0088/£.
D) none of the above
25) Dash Brevenshure works for the currency trading unit of ING Bank in London. He speculates that in the coming months the dollar will rise sharply vs. the pound. What should Dash do to act on his speculation?
A) Buy a call on the pound.
B) Sell a call on the pound.
C) Buy a put on the pound.
D) Sell a put on the pound.
26) A put option on yen is written with a strike price of ¥105.00/$. Which spot price maximizes your profit if you choose to exercise the option before maturity?
A) ¥100/$
B) ¥105/$
C) ¥110/$
D) ¥115/$
27) A call option on euros is written with a strike price of $1.30/euro. Which spot price maximizes your profit if you choose to exercise the option before maturity?
A) $1.20/euro
B) $1.25/euro
C) $1.30/euro
D) $1.35/euro
28) A call option on UK pounds has a strike price of $2.05/£ and a cost of $0.02. What is the break-even price for the option?
A) $2.03/£
B) $2.07/£
C) $2.05/£
D) The answer depends upon if this is a long or a short call option.
29) Your U.S firm has an accounts payable denominated in UK pounds due in 6 months. To protect yourself against unexpected changes in the dollar/pound exchange rate you should:
A) buy a pound put option.
B) sell a pound put option.
C) buy a pound call option.
D) sell a pound call option.
30) Jasper Pernik is a currency speculator who enjoys "betting" on changes in the foreign currency exchange market. Currently the spot price for the Japanese yen is ¥129.87/$ and the 6-month forward rate is ¥128.53/$. Jasper thinks the yen will move to ¥128.00/$ in the next six months. Jasper should ________ at ________ to profit from changing currency values.
A) buy yen; the forward rate
B) buy dollars; the forward rate
C) sell yen; the forward rate
D) There is not enough information to answer this question.
31) Jasper Pernik is a currency speculator who enjoys "betting" on changes in the foreign currency exchange market. Currently the spot price for the Japanese yen is ¥129.87/$ and the 6-month forward rate is ¥128.53/$. Jasper thinks the yen will move to ¥128.00/$ in the next six months. If Jasper buys $100,000 worth of yen at today's spot price and sells within the next six months at ¥128/$, he will earn a profit of:
A) $146.09
B) $101,460.94
C) $1460.94
D) nothing; he will lose money
32) Jasper Pernik is a currency speculator who enjoys "betting" on changes in the foreign currency exchange market. Currently the spot price for the Japanese yen is ¥129.87/$ and the 6-month forward rate is ¥128.53/$. Jasper thinks the yen will move to ¥128.00/$ in the next six months. If Jasper buys $100,000 worth of yen at today's spot price her potential gain is ________ and her potential loss is ________.
A) $100,000; unlimited
B) unlimited; unlimited
C) $100,000; $100,000
D) unlimited; $100,000
33) Jasper Pernik is a currency speculator who enjoys "betting" on changes in the foreign currency exchange market. Currently the spot price for the Japanese yen is ¥129.87/$ and the 6-month forward rate is ¥128.53/$. Jasper thinks the yen will move to ¥128.00/$ in the next six months. If Jasper's expectations are correct, then he could profit in the forward market by ________ and then ________.
A) buying yen for ¥128.00/$; selling yen at ¥128.53/$
B) buying yen for ¥128.53/$; selling yen at ¥128.00/$
C) There is not enough information to answer this question
D) He could not profit in the forward market.
34) The maximum gain for the purchaser of a call option contract is ________ while the maximum loss is ________.
A) unlimited; the premium paid.
B) the premium paid; unlimited.
C) unlimited; unlimited.
D) unlimited; the value of the underlying asset.
35) The buyer of a long call option:
A) has a maximum loss equal to the premium paid.
B) has a gain equal to but opposite in sign to the writer of the option.
C) has an unlimited maximum gain potential.
D) all of the above
36) Which of the following is NOT true for the writer of a call option?
A) The maximum loss is unlimited.
B) The maximum gain is unlimited.
C) The gain or loss is equal to but of the opposite sign of the buyer of a call option.
D) All of the above are true.
37) Which of the following is NOT true for the writer of a put option?
A) The maximum loss is limited to the strike price of the underlying asset less the premium.
B) The gain or loss is equal to but of the opposite sign of the buyer of a put option.
C) The maximum gain is the amount of the premium.
D) All of the above are true.
38) The buyer of a long put option:
A) has a maximum loss equal to the premium paid.
B) has a gain equal to but opposite in sign to the writer of the option.
C) has maximum gain potential limited to the difference between the strike price and the premium paid.
D) all of the above
39) The value of a European style call option is the sum of two components:
A) the present value plus the intrinsic value.
B) the time value plus the present value.
C) the intrinsic value plus the time value.
D) the intrinsic value plus the standard deviation.
True/False
1) Currency futures contracts have become standard fare and trade readily in the world money centers.
2) The major difference between currency futures and forward contracts is that futures contracts are standardized for ease of trading on an exchange market whereas forward contracts are specialized and tailored to meet the needs of clients.
3) The writer of the option is referred to as the seller, and the buyer of the option is referred to as the holder.
4) Foreign currency options are available both over-the-counter and on organized exchanges.
5) Jasper Pernik is a currency speculator who enjoys "betting" on changes in the foreign currency exchange market. Currently the spot price for the Japanese yen is ¥129.87/$ and the 6-month forward rate is ¥128.53/$. Jasper would earn a higher rate of return by buying yen and a forward contract than if he had invested her money in 6-month US Treasury securities at an annual rate of 2.50%.
6) Most option profits and losses are realized through taking actual delivery of the currency rather than offsetting contracts.
Essay
1) Why are foreign currency futures contracts more popular with individuals and banks while foreign currency forwards are more popular with businesses?
2) Compare and contrast foreign currency options and futures. Identify situations when you may prefer one vs. the other when speculating on foreign exchange.
8.2 Option Pricing and Valuation
Multiple Choice
1) Which of the following is NOT a factor in determining the premium price of a currency option?
A) the present spot rate
B) the time to maturity
C) the standard deviation of the daily spot price movement
D) All of the above are factors in determining the premium price.
2) The ________ of an option is the value if the option were to be exercised immediately. It is the option's ________ value.
A) intrinsic value; maximum
B) intrinsic value; minimum
C) time value; maximum
D) time value; minimum
3) Assume that a call option has an exercise price of $1.50/£. At a spot price of $1.45/£, the call option has:
A) a time value of $0.04.
B) a time value of $0.00.
C) an intrinsic value of $0.00.
D) an intrinsic value of -$0.04.
4) The single largest interest rate risk of a firm is:
A) interest sensitive securities.
B) debt service.
C) dividend payments.
D) accounts payable.
5) ________ is the possibility that the borrower's creditworthiness is reclassified by the lender at the time of renewing credit. ________ is the risk of changes in interest rates charged at the time a financial contract rate is set.
A) Credit risk; Interest rate risk
B) Repricing risk; Credit risk
C) Interest rate risk; Credit risk
D) Credit risk; Repricing risk
Instruction 8.1:
For the following problem(s), consider these debt strategies being considered by a corporate borrower. Each is intended to provide $1,000,000 in financing for a three-year period.
• Strategy #1: Borrow $1,000,000 for three years at a fixed rate of interest of 7%.
• Strategy #2: Borrow $1,000,000 for three years at a floating rate of LIBOR + 2%, to be reset annually. The current LIBOR rate is 3.50%
• Strategy #3: Borrow $1,000,000 for one year at a fixed rate, and then renew the credit annually. The current one-year rate is 5%.
6) Refer to Instruction 8.1. Choosing strategy #1 will:
A) guarantee the lowest average annual rate over the next three years.
B) eliminate credit risk but retain repricing risk.
C) maintain the possibility of lower interest costs, but maximizes the combined credit and repricing risks.
D) preclude the possibility of sharing in lower interest rates over the three-year period.
7) Refer to Instruction 8.1. Choosing strategy #2 will:
A) guarantee the lowest average annual rate over the next three years.
B) eliminate credit risk but retain repricing risk.
C) maintain the possibility of lower interest costs, but maximizes the combined credit and repricing risks.
D) preclude the possibility of sharing in lower interest rates over the three-year period.
8) Refer to Instruction 8.1. Choosing strategy #3 will:
A) guarantee the lowest average annual rate over the next three years.
B) eliminate credit risk but retain repricing risk.
C) maintain the possibility of lower interest costs, but maximizes the combined credit and repricing risks.
D) preclude the possibility of sharing in lower interest rates over the three-year period.
9) Refer to Instruction 8.1. Which strategy (strategies) will eliminate credit risk?
A) Strategy #1
B) Strategy #2
C) Strategy #3
D) Strategies #1 and #2
10) Refer to Instruction 8.1. If your firm felt very confident that interest rates would fall or, at worst, remain at current levels, and were very confident about the firm's credit rating for the next 10 years, which strategy would you likely choose? (Assume your firm is borrowing money.)
A) Strategy #3
B) Strategy #2
C) Strategy #1
D) Strategy #1, #2, or #3; you are indifferent among the choices.
11) Refer to Instruction 8.1. The risk of strategy #1 is that interest rates might go down or that your credit rating might improve. The risk of strategy #2 is: (Assume your firm is borrowing money.)
A) that interest rates might go down or that your credit rating might improve.
B) that interest rates might go up or that your credit rating might improve.
C) that interest rates might go up or that your credit rating might get worse.
D) none of the above
12) Refer to Instruction 8.1. The risk of strategy #1 is that interest rates might go down or that your credit rating might improve. The risk of strategy #3 is: (Assume your firm is borrowing money.)
A) that interest rates might go down or that your credit rating might improve.
B) that interest rates might go up or that your credit rating might improve.
C) that interest rates might go up or that your credit rating might get worse.
D) none of the above
13) Refer to Instruction 8.1. After the fact, under which set of circumstances would you prefer strategy #1? (Assume your firm is borrowing money.)
A) Your credit rating stayed the same and interest rates went up.
B) Your credit rating stayed the same and interest rates went down.
C) Your credit rating improved and interest rates went down.
D) Not enough information to make a judgment.
14) Refer to Instruction 8.1. After the fact, under which set of circumstances would you prefer strategy #2? (Assume your firm is borrowing money.)
A) Your credit rating stayed the same and interest rates went up.
B) Your credit rating stayed the same and interest rates went down.
C) Your credit rating improved and interest rates went down.
D) Not enough information to make a judgment.
15) Refer to Instruction 8.1. After the fact, under which set of circumstances would you prefer strategy #3? (Assume your firm is borrowing money.)
A) Your credit rating stayed the same and interest rates went up.
B) Your credit rating stayed the same and interest rates went down.
C) Your credit rating improved and interest rates went down.
D) Not enough information to make a judgment.
True/False
1) The time value is asymmetric in value as you move away from the strike price (i.e., the time value at two cents above the strike price is not necessarily the same as the time value two cents below the strike price).
8.3 Interest Rate Derivatives
Multiple Choice
1) An interbank-traded contract to buy or sell interest rate payments on a notional principal is called a/an:
A) forward rate agreement.
B) interest rate future.
C) interest rate swap.
D) none of the above
2) A/an ________ is a contract to lock in today interest rates over a given period of time.
A) forward rate agreement
B) interest rate future
C) interest rate swap
D) none of the above
3) An agreement to exchange interest payments based on a fixed payment for those based on a variable rate (or vice versa) is known as a/an:
A) forward rate agreement.
B) interest rate future.
C) interest rate swap.
D) none of the above
4) The financial manager of a firm has a variable rate loan outstanding. If she wishes to protect the firm against an unfavorable increase in interest rates she could:
A) sell an interest rate futures contract of a similar maturity to the loan.
B) buy an interest rate futures contract of a similar maturity to the loan.
C) swap the adjustable rate loan for another of a different maturity.
D) none of the above
5) An agreement to swap a fixed interest payment for a floating interest payment would be considered a/an:
A) currency swap.
B) forward swap.
C) interest rate swap.
D) none of the above
6) An agreement to swap the currencies of a debt service obligation would be termed a/an:
A) currency swap.
B) forward swap.
C) interest rate swap.
D) none of the above
7) Which of the following would be considered an example of a currency swap?
A) exchanging a dollar interest obligation for a British pound obligation
B) exchanging a eurodollar interest obligation for a dollar obligation
C) exchanging a eurodollar interest obligation for a British pound obligation
D) All of the above are examples of a currency swap.
8) A firm with fixed-rate debt that expects interest rates to fall may engage in a swap agreement to:
A) pay fixed-rate interest and receive floating rate interest.
B) pay floating rate and receive fixed rate.
C) pay fixed rate and receive fixed rate.
D) pay floating rate and receive floating rate.
9) A firm with variable-rate debt that expects interest rates to rise may engage in a swap agreement to:
A) pay fixed-rate interest and receive floating rate interest.
B) pay floating rate and receive fixed rate.
C) pay fixed rate and receive fixed rate.
D) pay floating rate and receive floating rate.
10) The interest rate swap strategy of a firm with fixed rate debt and that expects rates to go up is to:
A) do nothing.
B) pay floating and receive fixed.
C) receive floating and pay fixed.
D) none of the above
11) The potential exposure that any individual firm bears that the second party to any financial contract will be unable to fulfill its obligations under the contract is called:
A) interest rate risk.
B) credit risk.
C) counterparty risk.
D) clearinghouse risk.
12) Which of the following is an unlikely reason for firms to participate in the swap market?
A) To replace cash flows scheduled in an undesired currency with cash flows in a desired currency.
B) Firms may raise capital in one currency but desire to repay it in another currency.
C) Firms desire to swap fixed and variable payment or receipt of funds.
D) All of the above are likely reasons for a firm to enter the swap market.
True/False
1) Historically, interest rate movements have shown less variability and greater stability than exchange rate movements.
2) Unlike the situation with exchange rate risk, there is no uncertainty on the part of management for shareholder preferences regarding interest rate risk. Shareholders prefer that managers hedge interest rate risk rather than having shareholders diversify away such risk through portfolio diversification.
3) Interest rate futures are relatively unpopular among financial managers because of their relative illiquidity and their difficulty of use.
4) A basis point is one-tenth of one percent.
5) A swap agreement may involve currencies or interest rates, but never both.
6) Some of the world's largest and most financially sound firms may borrow at variable rates less than LIBOR.
7) Counterparty risk is greater for exchange-traded derivatives than for over-the-counter derivatives.
8) Swap rates are derived from the yield curves in each major currency.
Essay
1) Your firm is faced with paying a variable rate debt obligation with the expectation that interest rates are likely to go up. Identify two strategies using interest rate futures and interest rate swaps that could reduce the risk to the firm.
2) How does counterparty risk influence a firm's decision to trade exchange-traded derivatives rather than over-the-counter derivatives?
Answer: With exchange-traded derivatives, the exchange is the clearinghouse. Thus, firms do not need to worry about the other party making good on its obligations and it is easier to trade the derivative products.
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ECO 405 Week 5 Quiz – Strayer
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Week 5 Quiz 4 Chapter 6
Chapter 06
The Economics Of Education: Crisis And Reform
Multiple Choice Questions
1. According To The Census Bureau, High School Graduates Can Expect To Earn How Much During Their Working Years? A. $45,000 B. $1.2 M C. $2.1 M D. $2.5 M E. $4.4 M
2. According To The Census Bureau, A College Education Adds How Much To Earnings Over A Person's Work-Life? A. Nearly $1m B. $2.1 M C. $2.5m D. $4.4 M E. Over $5 M
3. According To The Census Bureau, Someone With A Professional Degree Can Earn Approximately How Much During A Typical Work-Life? A. $1 M B. $1.2 M C. $2.5 M D. $4.4 M E. Over $5m
4. Where Did U.S. Eighth Grade Students Rank Internationally In Terms Of Average Math Scores In 2007? A. At The Top B. Second C. Near The Middle D. Next To The Bottom E. At The Bottom
5. Where Did U.S. Eighth Grade Students Rank Internationally In Terms Of Average Science Scores In 2007? A. At The Top B. Second C. In The Middle D. In The Bottom Half E. At Bottom
6. Which Of The Following Is An Important Difference Between The United States And Other Countries In Terms Of Their K-12 Education System? A. The United States Spends Less On Education Per Pupil Than Most Other Countries B. The United States Spends A Higher Percentage Of Its Gdp On Education Than Other Countries C. The United States Has A Shorter School Year Than Most Other Countries D. The United States Has A Purely Private Market For Education E. All Of The Above
7. About How Much Does The United States Spend On Education, Per Pupil? A. $6,000 B. $7,000 C. $8,000 D. $9,000 E. $10,000
8. Approximately What Percent Of Its Gdp Does The United States Spend On Education? A. 2.0 B. 3.0 C. 3.9 D. 4.2 E. 5.3
9. Which Of The Following Best Describes The U.S. K-12 Educational System? A. It Is Largely Private B. It Is Mainly Private With Some Public Education C. It Is About Half Public And Half Private D. It Is Predominantly Public E. It Is Exclusively Public
10. Which Of The Following Is Of The U.S. K-12 Education System Relative To The K-12 Education System Of Other Developed Countries? A. It Has Lower Expenditures Per Pupil And Lower Achievement B. It Has Lower Expenditures Per Pupil And Higher Achievement C. It Has Higher Expenditures Per Pupil And Lower Achievement D. It Has Higher Expenditures Per Pupil And Higher Achievement E. It Has Equivalent Expenditures Per Pupil And Achievement
11. In 2003, Approximately What Percent Of School Aged Children Attended Public Schools? A. 90% B. 75% C. 50% D. 25% E. 10%
Questions 12 - 17 Refer To The Graph Below.
12. What Assumption Is Shown By The Fact That Mpc = Msc On The Graph? A. This Graph Is For Public Education B. There Are No Positive Externalities Associated With Education C. Education Has Positive Spillover Benefits For Society D. The Market Will Produce The Socially Optimal Quantity Of Education E. This Graph Illustrates A Private Market For Education
13. What Is This Family's Willingness To Pay For A First Year Of Education? A. $0 B. $4,000 C. $6,000 D. $8,000 E. $10,000
14. What Is The Equilibrium Level Of Education In This Market? A. 0 Years B. 1 Year C. 12 Years D. 16 Years E. Between 12 And 16 Years
15. What Tuition Would Result In The Family Demanding 16 Years Of Education? A. $0 B. Less Than $4,000 C. $4,000 D. $6,000 E. $10,000
16. Which Of The Following Is For The First Years Of Education? A. Mpb < Mpc B. Mpb > Mpc C. Msb > Msc D. Msb < Msc E. Mpb = Msb
17. Which Of The Following Is For The 16th Year Of Education? A. Mpb < Mpc B. Mpb > Mpc C. Msb > Msc D. Msb < Msc E. Mpb = Msb
Questions 18 - 23 Refer To The Graph Below.
18. For Which Level Of Education Is The Family's Mpb > Mpc? A. 1 Year B. Between 0 And E1 Years C. Between E1 And E* Years D. Exactly E1 Years E. Exactly E* Years
19. The Negative Slope Of The Demand Curve Shows That A. The Marginal Cost Of Education Increases As More Is Purchased B. The Marginal Benefit Of Education Increases As More Is Purchased C. The Marginal Benefit Of Each Additional Year Of Education Decreases D. There Are Positive Spillover Benefits Of Education E. Tuition Can Be Raised Above T1 Dollars
20. The Socially Optimal Level Of Education A. Is 0 Years B. Is 1 Year C. Is E1 Years D. Is E* Years. E. Cannot Be Determined From The Diagram.
21. For Which Year Of Education Is The Family's Mpb < Mpc? A. 0 Years B. 1 Year C. E1 Years D. E* Years E. None Of The Above
22. The Slope Of The Supply Curve Indicates That The A. Marginal Cost Of A Year Of Education Is Constant B. Marginal Benefit Of An Additional Year Of Education Increases C. Marginal Benefit Of An Additional Year Of Education Is Constant D. Marginal Benefit Of An Additional Year Of Education Increases E. Cost Of Education Is Subsidized By The Public
23. In The Diagram, The Equilibrium Level Of Education Is A. 0 Years B. 1 Year C. E1 Years D. E* Years E. Between E1 And E* Years
24. What Happens To The Marginal Benefit Of Education As A Child Gets More Schooling? It Will A. Increase B. Decrease C. Stay The Same D. Become Infinite E. Become Negative
25. Which Of The Following Is A Benefit Of Increased Education? A. Improved Literacy B. Increased Earnings C. Improved Health D. Greater Satisfaction E. All Of The Above
26. A Family's Demand For Education For A Child Reflects The Family's A. Income B. Preferences For Education C. Mpb Received From The Education D. Opportunity Cost Of Tuition E. All Of The Above
27. Which Of The Following Happens As Tuition Increases? A. The Demand For Education Increases B. The Demand For Education Decreases C. The Supply Of Education Increases D. The Years Of Education Demanded Fall E. The Cost Of Education Increases
28. The Supply Of Private Education Is Represented By A. The Mpb Curve B. The Mpc Curve C. The Msc Curve D. The Msb Curve E. None Of The Above
29. An Increase In The Demand For Education Will A. Increase The Supply Of Education B. Decrease The Equilibrium Tuition C. Decrease The Equilibrium Quantity Of Education D. Increase The Equilibrium Quantity Of Education E. Shift The Demand Curve For Education To The Left
30. A Decrease In The Cost Of Education Will A. Increase The Supply Of Education B. Increase The Equilibrium Tuition C. Decrease The Equilibrium Quantity Of Education D. Increase The Equilibrium Quantity Of Education E. Shift The Demand Curve For Education To The Left
31. Which Of The Following Will Decrease The Equilibrium Quantity Of Education In A Market? A. An Increase In The Demand For Education B. A Decrease In The Demand For Education C. A Decrease In Production Costs D. An Increase In The Supply Of Education E. None Of The Above
32. An Increase In Family Income Will A. Increase The Demand For Education B. Decrease The Demand For Education C. Increase The Quantity Of Education Supplied D. Increase The Quantity Of Education Demanded E. Decrease The Equilibrium Level Of Tuition
33. An Increase In The Marginal Benefit Of Education Will Cause Which Of The Following? A. The Demand Curve For Education Shifts Right B. The Demand Curve For Education Shifts Left C. The Supply Curve For Education Shifts Right D. The Supply Curve For Education Shifts Left E. The Equilibrium Number Of Years Of Education Will Decrease
34. The Creation Of New Learning Technologies Will Cause Which Of The Following To Decrease? A. The Demand For Education B. The Supply Of Education C. The Cost Of Education D. The Equilibrium Quantity Of Education E. The Number Of Children In School
35. If The Earnings Expected From A College Education Increase, It Will Lead To An Increase In A. The Demand For K-12 Education B. The Supply Of K-12 Education C. The Cost Of Education D. The Teacher Salaries E. All Of The Above
36. Education Is Said To Be Which Of The Following? A. Individually Consumed B. Individually Produced C. A Semi-Private Good D. A Private Good E. A Public Good
37. I Benefit Because You Become More Educated. This Is An Example Of A A. Negative Externality In Consumption B. Spillover Cost C. Positive Externality In Production D. Positive Externality In Consumption E. Negative Externality In Production
38. As The Number Of Years Of Education Increases, The Spillover Benefits Will A. Increase B. Decrease C. Stay The Same D. Become Negative E. None Of The Above
39. Which Of The Following Is An Example Of A Possible Spillover Benefit From Education? A. An Improved Democratic Process B. Improved Health C. Improved Public Safety D. More Charitable Giving E. All Of The Above
40. Students Learn About Health And Nutrition In School. This Provides A A. Positive Externality In Production B. Positive Externality In Consumption C. Negative Externality In Production D. Negative Externality In Consumption E. Cost To Society
41. Marginal Social Benefits Equal A. Mpb + Spillover Benefits B. Mpb - Spillover Benefits C. Mpcs D. Total Benefits + Positive Externalities In Consumption E. None Of The Above
42. With Positive Externalities In Consumption, The Market Equilibrium Quantity Will Be A. Greater Than Socially Optimal B. Less Than Socially Optimal C. Equal To The Socially Optimal Level D. Higher Than Otherwise E. None Of The Above
43. Educated Citizens Are More Likely To Be Informed Voters. This Is An Example Of A A. Positive Externality In Production B. Positive Externality In Consumption C. Negative Externality In Production D. Negative Externality In Consumption E. Cost To Society.
44. To Be Socially Optimal, Education Should Be Provided To The Point Where A. Mpb = Mpc B. Mpb = Msc C. Msb = Mpc D. Msb = Msc E. Mpb = Msb
45. The Existence Of Spillover Benefits Results In An Equilibrium Quantity In The Market That Is Socially Optimal. A. Higher Than B. Lower Than C. Equal To D. Better Than E. More Expansive Than
46. The Argument For Government Provision Of Education Hinges On The Existence Of A. Spillover Costs. B. Spillover Benefits. C. Voucher Programs. D. Negative Externalities In Production. E. Negative Externalities In Consumption
Questions 47 - 50 Refer To The Graph Below.
47. The Socially Optimal Years Of Education Is A. 1 B. Between 1 And 11 C. 11 D. 12 E. 16
48. What Is The Equilibrium Number Of Years Of Education The Market Will Provide? A. 0 B. 1 C. 11 D. 12 E. 16
49. Which Of The Following Government Actions Will Move The Market Equilibrium To The Socially Optimal Number Of Years Of Education? A. A Tax On Education Equal To $1,000 B. A Tax On Education Equal To $3,000 C. A Tuition Subsidy Equal To $1,000 D. A Tuition Subsidy Equal To $3,000 E. Government Provision Of All Education
50. A Tuition Subsidy Of $6,000 Would Lead To A. The Socially Optimal Quantity Of Education B. Greater Than The Socially Optimal Quantity Of Education C. Less Than The Socially Optimal Quantity Of Education D. More Public Education E. A Budget Surplus
Questions 51 - 54 Refer To The Graph Below.
51. The Socially Optimal Level Of Education Is A. 0 B. Between 0 And E1 C. E1 D. E2 E. E3
52. The Market Equilibrium Level Of Education Is A. 0 B. Between 0 And E1 C. E1 D. E2 E. E3
53. A Tuition Subsidy Equal To How Much Will Move The Market To The Socially Optimal Level Of Education? A. T3 - T2 B. T2 - T1 C. T3 - T1 D. T1 E. T2
54. A Tuition Subsidy Equal To T3 Would Result In Which Of The Following? A. The Socially Optimal Quantity Of Education B. Greater Than The Socially Optimal Quantity Of Education C. Less Than The Socially Optimal Quantity Of Education D. More Public Education E. A Budget Surplus
55. Greater Segregation Along Racial Lines Is A Likely Result Of A. Purely Private K-12 Education B. No Public K-12 Education C. Voucher Programs D. Tuition Subsidies E. All Of The Above
56. A Purely Private K-12 System Will Lead To A. Lower Private Costs B. Increased Public Costs C. Decreased Racial Segregation D. Increased Inequality E. Greater Social Benefits
57. In A Purely Private K-12 Education System, Spaces Would Be Allocated Based On A. Ability B. Equity C. Income D. Geographic Boundaries E. None Of The Above
58. In The Existing Public K-12 Education System, Spaces Are Allocated Based On A. Ability B. Equity C. Income D. Geographic Boundaries E. None Of The Above
59. A Program To Provide Public Funding For Students In Poor Performing Public Schools To Attend Other Schools Is Known As A. A Voucher Program B. A Charter School C. A Tuition Tax D. A Welfare Program E. Privatization
60. The Current K-12 Education System Can Be Described As A. Private B. Centralized C. Decentralized D. State Owned E. None Of The Above
61. Centralized Planning Leads To Which Of The Following? A. Limited Consumer Choice B. Decreased Quality C. Increased Prices D. Lack Of Responsiveness E. All Of The Above
62. Schools In Which Parents Or Other Groups Were Permitted To Create A New School With State Funding And Were Given Control Over Operations Are Known As A. Private Schools B. Voucher Schools C. Magnet Schools D. Experimental Schools E. Charter Schools
63. The Empirical Evidence Of The Effectiveness Of Voucher Programs Is Best Described As A. Positive B. Negative C. Inconsistent D. Substantial E. Nonexistent
64. Which Of The Following Is An Argument Against Voucher Programs? A. Cream Skimming B. Reduced Social Segregation C. Decreased Efficiency D. Increased Special Education E. All Of The Above
65. The Cream Skimming Argument Says That The Students Who Choose A Voucher Program Will Be A. Higher Income B. Lower Income C. Higher Achieving D. Non-Minority E. None Of The Above
66. Poor Students Are Less Likely To Participate In Voucher Programs Because Of A. Less Information B. Higher Transportation Costs C. Fewer Financial Resources D. A Weaker Tradition Of Education E. All Of The Above
67. Private School Cost Per Pupil Is Lower Because Of A. Fund Raising B. Private Contributions C. Student Fees D. Volunteer Labor E. All Of The Above
68. What Is The Relationship Between School Funding And Student Achievement? A. Positive B. Negative C. Mixed D. Unrelated E. Inverse
69. What Is The Relationship Between Student Achievement And Teacher Pay? A. Positive B. Negative C. Mixed D. Unrelated E. Inverse
70. What Is The Relationship Between Teacher Pay And A Shortage Of Teachers? A. Positive B. Negative C. Mixed D. Unrelated E. Direct
71. Public Schools Must Pay For Which Of The Following Expenses That Private Schools Do Not? A. Transportation B. Food C. Special Education D. All Of The Above E. None Of The Above
72. A Reduction In Class Size Should Be Undertaken As Long As The Marginal Benefit Of The Decrease Is A. Positive B. Negative C. Greater Than The Marginal Cost D. Less Than The Marginal Cost E. Increasing
73. Decreasing Average Class Size Without Changing Teacher Pay Leads To A. Lower Quality Teachers B. A Surplus Of Teachers C. Lower Costs Per Pupil D. Increased Segregation E. All Of The Above
74. Which Of The Following Statements Does Not Enjoy Widespread Agreement? A. Achievement Per Dollar In U.S. Education Is Too Low B. Reform Of The U.S. Education System Is Necessary To Maintain High Level Human Capital C. Smaller Class Sizes Can Improve Student Performance D. Voucher Programs Are The Most Effective Way To Improve The U.S. Education System E. Increased Teacher Pay Increases Teacher Quality
75. Education Could Be Considered A Semi-Private Good, Since A. There Are Spillover Benefits To Other Members Of Society Resulting From The Education Of A Child B. Education Of The Population Improves Everyone's Lives Since It Results In Greater Productivity And Income For All Members Of Society C. There Are Benefits To Society From Education, Since It Reduces The Crime Rate D. Education Produces Positive Externalities To Society E. All Of The Above
76. If Government Wishes To Increase The Quantity Of Higher Education Consumed, What Can Be Done To Accomplish This? A. Charge Tuition That Is Below The Full Costs Of Providing The Educational Services B. Operate Public Colleges C. Provide Reduced Tuition To Students D. Any Of The Above Alternatives Would Increase The Consumption Of Education E. The Government Should Not Attempt To Increase Education, Since It Is A Private Good
77. Studies Of Voucher Programs Indicate That The Effects Of Vouchers On Student Achievement
A. Are Small But Have Negative Impact On Student Performance
B. Are Received Primarily By African-American And Economically Disadvantaged Children C. Have Yet To Be Examined In Large-Scale Programs
D. Both B And C
E. None Of The Above
78. Research On The Effects Of Charter Schools Show
A. There Are Significantly Positive Impacts On Student Performance
B. There Are Significantly Negative Impacts On Student Performance
C. There Are Mixed Results, With Positive Impacts In Some Schools And Negative In Others
D. Research Has Yet To Be Undertaken On These New Types Of Schools
E. None Of The Above
True / False Questions
79. A College Education Does Not Improve Earnings Over A High School Degree.
80. A Master's Degree Increases Lifetime Earnings Over A Bachelor's Degree By $2.5m Over High School Graduates.
81. More Education Will Increase The Revenue A Worker Adds To A Firm.
82. Improved Education Will Lead To Higher Economic Growth In A Country.
83. American High School Graduates Outperform All Other Countries On Math And Science Exams.
84. The Length Of The School Year In The United States Is Longer Than In Most Other Developed Countries.
85. The United States Spends Over $8,000 Per Pupil On Secondary Education.
86. The United States Is Toward The Middle Of Countries In Rankings Of Percent Of Gdp Per Capita Spent On Education.
87. Ninety Percent Of School-Aged Children Attend Public Schools In The United States.
88. There Are Approximately 50 Million School-Aged Children In The United States.
89. The Marginal Benefit Of Education Increases As A Student Completes More Years Of Education.
90. More Education Leads To Improved Decision-Making In Families.
91. The Move From Illiteracy To Literacy Has High Marginal Benefits.
92. A Family's Demand For Education Comes From Its Marginal Private Benefits.
93. The Demand Curve For Education Has A Positive Slope.
94. Lower Tuition Rates Lead To Less Education.
95. Without Public Schools, There Would Be No K-12 Education.
96. Without Market Provision Of Education, There Is No Mechanism For Quality Control.
97. A Family Will Purchase Private Education As Long As The Mpb > Mpc.
98. Increased Income Will Increase The Demand For Education.
99. New Learning Technologies Will Increase The Cost Of Providing K-12 Education.
100. Everyone Agrees That Education Provides Significant Positive Spillover Benefits.
101. Years Of Education Completed Are Negatively Related To Criminal Activities.
102. The Greatest Positive Externalities Accrue In The Early Years Of K-12 Education.
103. Msb Of Education = Mpb + Positive Externalities.
104. If There Are Positive Externalities From Education, The Market Will Not Produce The Socially Optimal Level Of Education.
105. The Government Can Increase The Equilibrium Quantity Of Education In A Market Through Tuition Subsidies.
106. A Significant Positive Externality Of Education Would Support The Argument Against Public Education.
107. Public K-12 Education Facilitates Equal Opportunity.
108. A Purely Private K-12 Education System Would Increase Existing Segregation.
109. Markets Ration Education Based On A Price/Quality Trade-Off.
110. Public Schools Ration Education Based On A Price/Quality Tradeoff.
111. Voucher Programs Fund Students To Attend Poor Performing Schools.
112. Charter Schools Are Privately Funded And Community Controlled.
113. High-Income Students And Their Families Are More Likely To Benefit From Voucher Programs.
114. Voucher Programs Have Been Accused Of "Cream Skimming."
115. The Costs Of Private Schools Are Greater Than Their Tuition.
116. Private Schools Must Pay Some Types Of Costs That Public Schools Do Not.
117. Economists Agree That Voucher Programs Improve K-12 Education.
118. Smaller Class Size Increases Student Achievement.
119. Higher Teacher Salaries Do Not Change Student Achievement.
120. The Achievement Of Low-Income Students Improves More With Smaller Class Sizes, Relative To Higher Income Students.
121. Smaller Class Size Is Always Cost-Effective.
122. Increased School Funding Increases Student Achievement.
123. Increasing Teachers' Salaries Does Not Affect Student Achievement.
124. The Opportunity Cost Of Becoming A Teacher Is The Salary Of Similarly Trained Professionals.
125. Increased Spending On K-12 Education Is Certain To Be Cost-Effective.
126. The United States' K-12 Education System Has An Efficient Level Of Achievement Per Dollar Spent.
127. Increased Competition In K-12 Education Can Lead To An Improved Education System.
128. Targeting Increased Funding To Programs For Disadvantaged Children Is The Most Cost-Effective.
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ECO 305 Week 5 Quiz – Strayer
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Week 5 Quiz 4 Chapter 7
CHAPTER 7
TRADE POLICIES FOR THE DEVELOPING NATIONS
MULTIPLE CHOICE
1. Which of the following is not a major factor that encourages developing nations to form international commodity agreements?
a. Inelastic commodity supply schedules
b. Inelastic commodity demand schedules
c. Export markets that tend to be unstable
d. Secular increases in their terms of trade
2. International commodity agreements do not:
a. Consist of consuming and producing nations who desire market stability
b. Levy export cutbacks so as to offset rising commodity prices
c. Utilize buffer stocks to generate commodity price stability
d. Increase the supply of commodities to prevent rising prices
3. Concerning the price elasticities of supply and demand for commodities, empirical estimates suggest that most commodities have:
a. Inelastic supply schedules and inelastic demand schedules
b. Inelastic supply schedules and elastic demand schedules
c. Elastic supply schedules and inelastic demand schedules
d. Elastic supply schedules and elastic demand schedules
4. If the demand schedule for bauxite is relatively inelastic to price changes, an increase in the supply schedule of bauxite will cause a:
a. Decrease in price and a decrease in sales revenue
b. Decrease in price and an increase in sales revenue
c. Increase in price and a decrease in sales revenue
d. Increase in price and an increase in sales revenue
5. A primary goal of international commodity agreements has been the:
a. Maximization of members' revenues via export taxes
b. Nationalization of corporations operating in member nations
c. Adoption of tariff protection against industrialized nation sellers
d. Moderation of commodity price fluctuations when markets are unstable
6. Which device has the International Tin Agreement utilized as a way of stabilizing tin prices?
a. Multilateral contracts
b. Export subsidies
c. Buffer stocks
d. Export tariffs
7. Which method has not generally been used by the international commodity agreements to stabilize commodity prices?
a. Production quotas applied to the level of commodity output
b. Buffer stock arrangements among producing nations
c. Export restrictions applied to international sales of commodities
d. Measures to nationalize foreign-owned production operations
8. The OPEC nations during the 1970s manifested their market power by utilizing:
a. Export tariffs levied for revenue purposes
b. Export tariffs levied for protective purposes
c. Import tariffs levied for protective purposes
d. Import tariffs levied for revenue purposes
9. One factor that has prevented the formation of cartels for producers of commodities is that:
a. The demand for commodities tends to be price inelastic
b. Substitute products exist for many commodities
c. Commodity produces have been able to dominate world markets
d. Production of most commodities is capital intensive
10. Which device has been used by the International Wheat Agreement to stipulate the minimum prices at which importers will buy stipulated quantities from producers and the maximum prices at which producers will sell stipulated quantities to importers?
a. Buffer stocks
b. Export controls
c. Multilateral contracts
d. Production controls
11. If the bauxite exporting countries form a cartel to boost the price of bauxite so as to increase sales revenue, they believe that the demand for bauxite:
a. Is inelastic with respect to price changes
b. Is elastic with respect to price changes
c. Will increase in response to a price increase
d. Will not change in response to a price change
12. If the supply schedule for tin is relatively inelastic to price changes, a decrease in the demand schedule for tin will cause a:
a. Decrease in price and an increase in sales revenue
b. Decrease in price and a decrease in sales revenue
c. Increase in price and an increase in sales revenue
d. Increase in price and a decrease in sales revenue
13. Which of the following could partially explain why the terms of trade of developing countries might deteriorate over time?
a. Developing-country exports mainly consist of manufactured goods
b. Developing-country imports mainly consist of primary products
c. Commodity export prices are determined in highly competitive markets
d. Commodity export prices are solely determined by developing countries
14. Which terms-of-trade concept emphasizes a nation's capacity to import?
a. Income terms of trade
b. Commodity terms of trade
c. Barter terms of trade
d. Price terms of trade
15. Which trade strategy have developing countries used to restrict imports of manufactured goods so that the domestic market is preserved for home producers, who thus can take over markets already established in the country?
a. International commodity agreement
b. Export promotion
c. Multilateral contract
d. Import substitution
16. Which trade strategy have developing countries used to replace commodity exports with exports such as processed primary products, semi-manufacturers, and manufacturers?
a. Multilateral contract
b. Buffer stock
c. Export promotion
d. Export quota
17. To help developing countries expand their industrial base, some industrial countries have reduced tariffs on designated manufactured imports from developing countries below the levels applied to imports from industrial countries. This scheme is referred to as:
a. Generalized system of preferences
b. Export-led growth
c. International commodity agreement
d. Reciprocal trade agreement
18. Which nation accounts for the largest amount of OPEC's oil reserves and production?
a. Iran
b. Libya
c. Iraq
d. Saudi Arabia
19. Assuming identical cost and demand curves, OPEC as a cartel will, in comparison to a competitive industry:
a. Produce greater output and charge a lower price
b. Produce greater output and charge a higher price
c. Produce less output and charge a higher price
d. Produce less output and charge a lower price
20. Which of the following situations reduces the likelihood of successful operation of a cartel?
a. Cartel sales experience a rapid expansion
b. The demand for cartel output is price inelastic
c. The number of firms in the cartel is large
d. It is very difficult for new firms to enter the market
21. Which industrialization policy used by developing countries places emphasis on the comparative advantage principle as a guide to resource allocation?
a. Export promotion
b. Import substitution
c. International commodity agreements
d. Multilateral contract
22. A widely used indicator to differentiate developed countries from developing countries is:
a. International trade per capita
b. Real income per capita
c. Unemployment per capita
d. Calories per capita
23. Concerning the hypothesis that there has occurred a long-run deterioration in the developing countries' terms of trade, empirical studies provide:
a. Mixed evidence that does not substantiate the deterioration hypothesis
b. Overwhelming support for the deterioration hypothesis
c. Overwhelming opposition to the deterioration hypothesis
d. None of the above
24. For the oil-importing countries, the increases in oil prices in 1973-1974 and 1979-1980 resulted in all of the following except:
a. Balance of trade deficits
b. Price inflation
c. Constrained economic growth
d. Improving terms of trade
25. Hong Kong and South Korea are examples of developing nations that have recently pursued industrialization policies.
a. Import substitution
b. Export promotion
c. Commercial dumping
d. Multilateral contract
26. Stabilizing commodity prices around long-term trends tends to benefit importers at the expense of exporters in markets characterized by:
a. Demand-side disturbances
b. Supply-side disturbances
c. Demand-side and supply-side disturbances
d. None of the above
27. Stabilizing commodity prices around long-term trends tends to benefit exporters at the expense of importers in markets characterized by:
a. Demand-side disturbances
b. Supply-side disturbances
c. Demand-side and supply-side disturbances
d. None of the above
28. To be considered a good candidate for an export cartel, a commodity should:
a. Be a manufactured good
b. Be a primary product
c. Have a high price elasticity of supply
d. Have a low price elasticity of demand
29. To be considered a good candidate for an export cartel, a commodity should:
a. Be a manufactured good
b. Be a primary product
c. Have a low price elasticity of supply
d. Have a high price elasticity of demand
30. To help developing nations strengthen their international competitiveness, many industrial nations have granted nonreciprocal tariff reductions to developing nations under the:
a. International commodity agreements program
b. Multilateral contract program
c. Generalized system of preferences program
d. Export-led growth program
The diagram below illustrates the international tin market. Assume that producing and consuming countries establish an international commodity agreement under which the target price of tin is $5 per pound.
Figure 7.1. Defending the Target Price in Face of Changing Demand Conditions
31. Consider Figure 7.1. Suppose the demand for tin increases from D0 to D1. Under a buffer stock system, the buffer-stock manager could maintain the target price by:
a. Selling 15 pounds of tin
b. Selling 30 pounds of tin
c. Buying 15 pounds of tin
d. Buying 30 pounds of tin
32. Consider Figure 7.1. Suppose the demand for tin decreases from D0 to D2. Under a buffer stock system, the buffer-stock manager could maintain the target price by:
a. Selling 15 pounds of tin
b. Selling 30 pounds of tin
c. Buying 15 pounds of tin
d. Buying 30 pounds of tin
33. Consider Figure 7.1. Suppose the demand for tin decreases from D0 to D2. Under a system of export quotas, the tin producers could maintain the target price by:
a. Increasing the quantity of tin supplied by 15 pounds
b. Increasing the quantity of tin supplied by 30 pounds
c. Decreasing the quantity of tin supplied by 15 pounds
d. Decreasing the quantity of tin supplied by 30 pounds
The diagram below illustrates the international tin market. Assume that the producing and consuming countries establish an international commodity agreement under which the target price of tin is $5 per pound.
Figure 7.2. Defending the Target Price in Face of Changing Supply Conditions
34. Consider Figure 7.2. Suppose the supply of tin increases from S0 to S1. Under a buffer stock system, the buffer-stock manager could maintain the target price by:
a. Purchasing 15 pounds of tin
b. Purchasing 30 pounds of tin
c. Selling 15 pounds of tin
d. Selling 30 pounds of tin
35. Consider Figure 7.2. Suppose the supply of tin decreases from S0 to S2. Under a buffer stock system, the buffer-stock manager could maintain the target price by:
a. Purchasing 15 pounds of tin
b. Purchasing 30 pounds of tin
c. Selling 15 pounds of tin
d. Selling 30 pounds of tin
36. Consider Figure 7.2. Assume there exists a cartel of several producers that is maximizing total profit. If one producer cheats on the cartel agreement by decreasing its price and increasing its output, rational action of the other producers is to:
a. Increase their price in order to regain sacrificed profits
b. Decrease their price as well
c. Keep on selling at the agreed-upon price
d. Give the product away for free
37. A reason why it is difficult for producers to maintain a cartel is that:
a. The elasticity of demand for the cartel's output decreases over time
b. Producers in the cartel have the economic incentive to cheat
c. Economic profits discourage other producers from entering the industry
d. Producers in the cartel have the motivation to lower price but not to raise price
38. Once a cartel establishes its profit-maximizing price:
a. Entry into the industry of new competitors will not affect the cartel's profits
b. Output changes by cartel members have no effect on the market price
c. Each cartel member is tempted to cheat on the cartel price in order to add to its profit
d. All cartel members have a strong incentive to adhere to the agreed-upon price
Figure 7.3. World Oil Market
39. Consider Figure 7.3. Under competitive conditions, the quantity of oil produced equals:
a. 40 barrels
b. 70 barrels
c. 90 barrels
d. 110 barrels
40. Consider Figure 7.3. Under competitive conditions, the price of a barrel of oil equals:
a. $7
b. $11
c. $12
d. $16
41. Consider Figure 7.3. Under competitive conditions, producer profits total:
a. $0
b. $140
c. $200
d. $280
42. Consider Figure 7.3. Under a profit-maximizing cartel, the quantity of oil produced equals:
a. 40 barrels
b. 70 barrels
c. 90 barrels
d. 110 barrels
43. Consider Figure 7.3. Under a profit-maximizing cartel, the price of a barrel of oil equals:
a. $7
b. $11
c. $16
d. $19
44. Consider Figure 7.3. Under a profit-maximizing cartel, producers realize:
a. Profits totaling $280
b. Profits totaling $360
c. Losses totaling $140
d. Losses totaling $180
45. Import substitution policies make use of:
a. Tariffs that discourage goods from entering a country
b. Quotas applied to goods that are shipped abroad
c. Production subsidies granted to industries with comparative advantages
d. Tax breaks granted to industries with comparative advantages
46. Export-led growth tends to:
a. Exploit domestic comparative advantages
b. Discourage competition in the global economy
c. Lead to unemployment among domestic workers
d. Help firms benefit from diseconomies of large-scale production
47. All of the following nations except ____ have recently utilized export-led (outward oriented) growth policies.
a. Hong Kong
b. South Korea
c. Argentina
d. Singapore
48. The characteristics that have underlaid the economic success of the "high-performing Asian Economies" have included all of the following except:
a. High rates of domestic investment
b. Diseconomies of scale occurring at low output levels
c. Large endowments of human capital
d. High levels of labor productivity
49. The development of countries like South Korea and Singapore has been underlaid by all of the following except:
a. High domestic interest rates
b. R&D and product innovation
c. Education and on-the-job training
d. High levels of saving and investment
50. For most developing countries:
a. Productivity is high among domestic workers
b. Population-growth and illiteracy rates are low
c. Saving and investment levels are high
d. Agricultural goods and raw materials constitute much of domestic output
51. East Asian economies have performed well by
a. Obtaining foreign technology
b. Remaining open to international trade
c. Investing in their people
d. All of the above
52. East Asian economies started enacting export-push strategies
a. By late 1950s and 1960s
b. Immediately after World War II
c. In the late 1980s
d. In the early 2000s
53. Prior to the formation of the Organization of Petroleum Exporting Countries, individual oil producing nations,
a. Operated like sellers in a competitive market
b. Behaved like individual sellers in a monopoly market
c. Had considerable control over the price of oil
d. Both b and c.
54. A key factor underlying the instability of primary product prices and export receipts of developing nations is the
a. Low price elasticity of the demand of primary products
b. High price elasticity of supply of primary products
c. High price elasticity of demand of primary products
d. None of the above
TRUE/FALSE
1. The developing nations are most of those in Africa, Asia, North America, and Western Europe.
2. Most developing-nation exports go to industrial nations while most developing-nation imports originate in industrial nations.
3. The majority of developing-nation exports are primary products such as agricultural goods and raw materials; of the manufactured goods exported by developing nations, most are labor-intensive goods.
4. Developing nations overwhelmingly acknowledge that they have benefited from international trade according to the principle of comparative advantage.
5. Among the economic problems facing developing countries have been low dependence on primary-product exports, unstable export markets, and worsening terms of trade.
6. For developing countries, a key factor underlying the instability of primary-product prices and export receipts is the high price elasticity of demand for products such as tin and copper.
7. Empirical research indicates that the demand and supply schedules for most primary products are relatively inelastic to changes in price.
8. If the demand for coffee is price inelastic, an increase in the supply of coffee leads to falling prices and rising sales revenues.
9. Not only do changes in demand induce relatively wide fluctuations in price when supply is inelastic, but changes in supply induce relatively wide fluctuations in price when demand is inelastic.
10. Developing countries have complained that because their commodity terms of trade has deteriorated in recent decades, they should receive preferential tariff treatment from industrialized countries.
11. To promote stability in commodity markets, International Commodity Agreements have utilized production and export controls, buffer stocks, and multilateral contracts.
12. During periods of falling demand for coffee, an International Commodity Agreement could offset downward pressure on price by implementing policies to increase the supply of coffee.
13. To prevent the market price of tin from rising above the target price, the manager of a buffer stock will purchase excess supplies of tin from the market.
14. To prevent the market price of tin from falling below the target price, the manager of a buffer stock would purchase any excess supply of tin that exists at the target price.
15. Prolonged defense of a price ceiling tends to increase the supply of a commodity held by a buffer stock manager, thus putting downward pressure on price.
16. Rather than conduct massive stabilization operations, buffer stock officials will periodically revise target prices should they move out of line with long-term price trends.
17. A multilateral contract stipulates the maximum price at which importing nations will purchase guaranteed quantities from producing nations and the minimum price at which producing nations will sell guaranteed amounts to importing nations.
18. It is widely agreed that import-substitution policies have been a main contributor to above-average growth rates in developing countries.
19. Under the Generalized System of Preferences program, the major industrial countries agree to temporarily reduce tariffs on designated imports from other industrial countries.
20. The "newly industrializing countries" of East Asia have emphasized the implementation of import-substitution policies to insulate their industries from international competition.
21. In recent decades, the East Asian "newly industrializing countries" have pursued export-led growth (outward orientation) as an industrialization strategy.
22. The purpose of a cartel is to support prices higher than would occur under more competitive conditions, thus increasing the profits of cartel members.
23. A cartel tends to be most successful in maximizing the profits of its members when there are a large number of producers in the cartel and these producers' cost and demand conditions greatly differ from each other.
24. When cartel members agree to restrict output to increase the price of their product, a single member of the cartel has an economic incentive to violate the agreement by increasing its output so as to increase profits.
25. Developing countries have often felt that it is easier to protect their manufacturers, via import-substitution policies, against foreign competitors than to force industrial nations to reduce trade restrictions on products exported by developing countries.
26. Import-substitution policies are supported by the fact that many developing countries have small domestic markets and thus their producers enjoy the benefits of diseconomies of small-scale production.
27. Export-led growth industrialization suffers a major problem: it depends on the willingness and ability of foreign nations to absorb the goods exported by the country pursuing such a policy.
28. The so-called Four Tigers include Australia, South Korea, Taiwan, and Hong Kong.
29. By the 1990s, China had departed from a capitalistic economy and shifted to a Soviet-type economy encompassing small-scale, labor-intensive industry.
30. During the late 1980s and early 1990s, China dismantled much of its centrally-planned economy and permitted free enterprise to replace it.
31. In its transition toward capitalism, by the 1990s China permitted free enterprise as well as democracy for its people.
32. Most of China's manufactured exports have constituted labor-intensive goods.
33. In 1999 the United States revoked the normal-trade-relations (most-favored-nation) status it provided China in retaliation for China's suppression of human rights.
34. A multilateral contract specifies the maximum price at which exporting countries agree to sell a product and the minimum price at which importing countries agree to buy a product.
35. As a profit-maximizing cartel, the Organization of Petroleum Exporting Countries would produce a greater output and charge a lower price than what would occur in a competitive market.
36. The success of buffer stocks is limited by the fact that stockpiles of a product may be exhausted after prolonged sales, while funds may be exhausted after prolonged purchases.
37. The United Nation Conference on Trade and Development in 1964 was successful in convincing developing countries to switch from export-led industrialization to import-substitution industrialization.
38. Under the Generalized System of Preferences program, the industrialized countries agree to maintain lower tariffs on imports of natural resources and higher tariffs on imports of manufactured goods.
39. The replacement of imports of one nation with imports of another nation is known as "import substitution."
40. During periods of weak demand, the Organization of Petroleum Countries has implemented production (export) quotas to ensure that excess oil supplies be kept off the market.
SHORT ANSWER
1. What are some major trade problems faced by developing nations?
2. Are economic downturns helpful to cartels?
ESSAY
1. What are some of the growth strategies that have been employed by the developing nations? How successful are these strategies?
2. Describe the flying-geese pattern of economic growth? What countries have pursued this strategy?
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ECO 302 Week 5 Quiz – Strayer
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Chapters 6 and 7
Chapter 6
TRUE/FALSE
1. Bond holdings and interest income are zero for the whole economy.
2. The household real budget constraint shows that household real consumption is equal to household real income plus household real saving.
3. In the Barro model prices like the real wage adjust to clear markets like the labor market.
4. In the Barro model the nominal rate of return on capital, (R/P) - is greater than the nominal return on bonds, i, because capital is viewed by households as more risky than bonds.
5. Real profit equals real output plus spending on capital and labor inputs.
6. In the bond market, a higher interest rate means that borrowing is less expensive than before.
7. Household decisions depend on the nominal values for wages and rent rather than the real values for wages and rent.
8. In the Barro model, households use money as a means for trading goods and services.
9. In the Barro market model, gold serves as money.
10. The market-clearing interest rate depends on the marginal productivity of capital.
MULTIPLE CHOICE
1. The market clearing approach assumes that:
a. people are not able to affect prices that influence their decisions. c. firms are not able to affect prices that influence their decisions.
b. prices adjust to clear markets. d. all of the above.
2. The market clearing approach assumes that:
a. people are not able to affect prices that influence their decisions. c. firms are able to affect prices that influence their decisions.
b. prices change very slowly. d. all of the above.
3. The market clearing approach assumes that:
a. people are able to affect prices that influence their decisions. c. firms are able to affect prices that influence their decisions.
b. prices adjust to clear markets. d. all of the above.
4. The market clearing approach assumes that:
a. people are able to affect prices that influence their decisions. c. firms are not able to affect prices that influence their decisions.
b. prices change very slowly. d. all of the above.
5. The labor market clears when:
a. the real wage causes LS = LD. c. the marginal product of labor is zero.
b. the real wage causes LS to be minimized. d. the real wage causes LS to be as large as possible.
6. In the goods market in the Barro model households can buy:
a. bonds. c. labor services.
b. goods to increase their stock of capital. d. all of the above.
7. The goods market the price, P, is:
a. the price level. c. the price of a particular good.
b. the rental price of goods. d. the interest rate.
8. In the rental market in the Barro model, households buy and sell:
a. real estate. c. the use of capital for one period.
b. consumer durables like cars. d. all of the above.
9. A bond that is traded in the bond market in the Barro model is piece of paper that:
a. is the lenders claim to the amount owed by the borrower. c. is the lenders claim to ownership in the company.
b. is the borrowers claim to the amount owed by the lender. d. assures the person is who they say they are.
10. Money in the Barro model is held because:
a. for its own sake. c. to earn interest.
b. to trade fairly soon for something else. d. all of the above.
11. Money in the Barro model is:
a. gold. c. interest earning.
b. a medium of exchange. d. all of the above.
12. One unit of money in the Barro model has a purchasing power of:
a. the price level time that one unit, P. c. the interest rate, i.
b. the price level over the interest rate, (P/i). d. one over the price level, (1/P)
13. If a household has $2,000 in money and the price level is 10, then the real value of its money is:
a. $10. c. 200 goods.
b. $20,000. d. 1,900 goods.
14. The real wage is:
a. hourly earning after taxes. c. the value of a worker’s time in goods received.
b. wages plus fringe benefits. d. the price level divided by the nominal wage rate.
15. If the nominal wage rate is $10 per hour and the price level is 2, then the real wage a worker earns is:
a. five units of goods per hour. c. twenty units of goods per hour.
b. eight units of goods per hour. d. one-fifth unit of goods per hour.
16. If the rental price of a capital good is $100 and the price level is 25, then when renting the capital the owner’s real earnings are:
a. 4 units of output per period. c. seventy five units of output per period.
b. 2,500 units of output per period. d. one-forth unit of output per period.
17. The rental price of capital is:
a. a dollar amount per unit of capital. c. a nominal interest rate
b. a real interest rate. d. profit.
18. Over all households bonds, B, must total zero because:
a. there are no bonds in the model. c. bonds are not important in the model.
b. for every dollar loaned a dollar is borrowed in the bond market. d. bonds are illegal in most economies.
19. The profit in the model is:
a. output - (wages times labor hired + the rental price times capital rented). c. (price times output) - (wages times labor hired + the rental price times capital rented).
b. (price times output) divided by (wages times labor hired + the rental price times capital rented). d. (wages times labor hired + the rental price times capital rented) - (price times output).
20. The rate of return from owning capital is:
a. the rental price of capital, R. c. the net nominal rental income, (R/P)•PK - PK.
b. the value of depreciation, PK. d. the real rental price less depreciation, (R/P) - .
21. The principal of a bond is:
a. the amount of interest paid each period. c. the amount of interest paid over the term of the bond.
b. the initial amount borrowed. d. the total amount to be paid back including the amount borrow and the amount of interest paid over the term of the bond.
22. The maturity of a bond is:
a. the amount of interest paid each period. c. the amount of interest paid over the term of the bond.
b. the amount borrowed. d. the time at which the lender must be paid back.
23. If the principal of a bond is $100, it matures in a year and the interest rate is 4%, then at the interest payment on this bond will be:
a. $100. c. $4.
b. $96. d. $400.
24. If the principal of a bond is $1000, it matures in a year and the interest rate is 6%, then at the end of the year the lender will receive:
a. $1000. c. $60.
b. $1060. d. $940.
25. In the market clearing model, for the whole economy interest income is:
a. bonds minus the interest rate. c. the interest rate divided by bonds.
b. zero. d. bonds divided by the interest rate.
26. Individual household nominal income includes:
a. nominal interest income, iB. c. nominal wage income, wL.
b. nominal net rental income, [(R/P) - PK]•PK. d. all of the above.
27. In the model the nominal interest rate equals the nominal net return on capital, i = (R/P) - , because:
a. other than rates of return bonds and capital look the same to households as assets. c. bonds are riskier than capital.
b. capital is riskier than bonds. d. bonds are zero in the aggregate.
28. In the model the nominal interest rate equals the nominal net return on capital, i = (R/P) - , because:
a. bonds are zero in the aggregate. c. bonds are riskier than capital.
b. capital is riskier than bonds. d. if bonds offered a higher return than capital households would hold no capital.
29. According to the household nominal budget constraint, PC+ B+P• K = + wL + i(B + PK), households can use their income to:
a. purchase consumption goods. c. purchase capital goods.
b. acquire more bonds. d. all of the above.
30. Interest income is:
a. positive for net bond holders. c. negative for net bond issuers.
b. zero for the whole economy. d. all of the above.
31. According to the household nominal budget constraint, PC+ B+P• K = + wL + i(B + PK), households can use their income to:
a. purchase consumption goods. c. acquire more money.
b. hire more workers. d. all of the above.
32. According to the household nominal budget constraint, PC+ B+P• K = + wL + i(B + PK), households can use their income to:
a. acquire more money. c. pay more wages.
b. acquire more bonds. d. all of the above.
33. According to the household nominal budget constraint, PC+ B+P• K = + wL + i(B + PK), households can use their income to:
a. hire more workers. c. purchase capital goods.
b. acquire more money. d. all of the above.
34. If a household this week produces 20 of its product at a cost of 50 cents each, sells them for $1, works 40 hours at $10 per hour, must pay $10 in interest owed on its borrowing and rents out 10 units of capital at $100 for the week, the household’s, nominal income is:
a. $1,440 this week. c. $1,420 this week.
b. $1,400 this week. d. none of the above.
35. The household real budget constraint C + ( B/P) + K = ( /P)+ (w/P)•L + i•((B/P) + K).
shows that in our model:
a. households get income only from labor. c. households can spend their income only on consumption.
b. households can spend their income on consumption or acquiring more capital and bonds. d. households view bonds as riskier than capital.
36. The household’s budget constraint shows that:
a. sources of fund = uses of funds. c. labor income is the largest part of income.
b. profits are the largest part of income d. consumption is the largest part of spending.
37. The household real budget constraint C + ( B/P) + K = ( /P) + (w/P)•L + i•((B/P) + K).
shows that in our model:
a. households get income only from labor. c. households get income from profits from production, labor and interest on bonds and capital.
b. households can spend their income only on consumption. d. households view bonds as riskier than capital.
38. To maximize profit a firm should hire labor:
a. until it can produce no more of its product. c. until the marginal product of labor equal the real wage rate.
b. until the marginal product of labor begins to fall. d. until the marginal product of labor is zero.
39. An investment in the Barro model is:
a. the purchase of a bond. c. the purchase of a capital good used for production.
b. the purchase of ownership in a firm. d. all of the above.
40. To maximize profit a firm should hire capital:
a. until it can produce no more of its product. c. until the marginal product of capital equal the real rental price of capital.
b. until the marginal product of labor begins to fall. d. until the marginal product of capital is zero.
41. In the market for capital services:
a. the supply of capital adjusts to create market clearing. c. the demand for capital adjusts to create market clearing.
b. the real rental price of capital adjusts to create market clearing. d. all of the above.
42. In the market clearing model, depreciation, , is:
a. the rate at which capital disappears. c. the rate at which bonds lose value.
b. the rate at which money loses value. d. all of the above.
43. In the market clearing model:
a. households can owe pay interest. c. for the whole economy interest income is zero.
b. households can earn interest. d. all of the above.
44. In the market clearing model, nominal saving is:
a. the change in money + the change in bonds + the change in the nominal value of capital. c. + wL + i(B + PK) - PC.
b. nominal income less nominal consumption. d. all of the above.
45. In the market clearing model, nominal saving is:
a. the change in money + the change in bonds. c. + wL + i(B + PK) - PC.
b. nominal income plus nominal consumption. d. all of the above.
46. In the market clearing model, nominal saving is:
a. always zero. c. nominal income - depreciation of capital.
b. nominal income less nominal consumption. d. all of the above.
47. In the market clearing model, nominal saving is:
a. the change in money + the change in bonds + the change in the nominal value of capital. c. always zero.
b. nominal income plus nominal saving. d. all of the above.
48. Real saving is:
a. + wL + i(B + PK) - PC. c. ( /P) + (w/P)L + i((B/P) + K) - C.
b. output plus consumption. d. all of the above.
49. Figure 6.1
In Figure 6.1 an increase in real income is shown by:
a. a shift of the curve up and to the right. c. a shift of the curve inward and to the left.
b. rotating the curve out the real consumption axis. d. rotating the curve up the real saving axis.
50. In the market clearing model, the demand for capital and labor come from:
a. the tastes of people. c. the objective of profit maximizing.
b. rental and labor markets. d. all of the above.
51. In the goods market, production of goods comes from
a. large corporate firms. c. households.
b. technology-related businesses. d. large partnerships.
52. Households buy goods on the goods market because they wish to
a. consume. c. export.
b. invest. d. both (a) and (b).
53. Households provide to the rental market
a. all available capital services, so that no capital remains idle. c. none of their capital services, since households do not own capital.
b. some of their capital services, leaving a fraction of capital idle. d. none of their capital services, so that only businesses own capital.
54. In the Barro market model, currency is used
a. to earn interest income. c. only in the bond market.
b. as a medium of exchange. d. only in the labor market.
55. Households earn interest from
a. holding bonds and holding money. c. holding bonds, but not from holding money.
b. holding money, but not from holding bonds. d. none of the above.
56. To simplify the analysis of the bond market, the Barro bond market model initially assumes that
a. each bond has a different risk level. c. bond maturities are long.
b. a bond has no principal amount. d. the inflation rate is zero.
57. A household views the real rental price for capital (R/P) as
a. the rate of return on capital only after it is adjusted for depreciation. c. the profit from its production of goods and services.
b. the rate of return on capital only after it is adjusted for inflation. d. the profit from its holdings of bonds and money.
58. In the Barro markets model, the medium(s) of exchange
a. is bonds. c. are both bonds and money.
b. is money. d. are bonds, money, and labor services.
59. If bonds offer a higher rate of return than capital does, then households would
a. hold neither bonds nor capital. c. hold bonds only.
b. hold capital only. d. hold both bonds and capital.
60. In the market for capital services, if the real rental price is below the market-clearing rental price, then
a. suppliers of capital services would compete by bidding down the real rental price. c. the market for capital services would be in equilibrium.
b. suppliers of capital services would compete by bidding up the real rental price. d. demanders of capital services would compete by bidding up the real rental price.
SHORT ANSWER
1. How is profit calculated in the model?
2. What is the household real budget constraint and what does it tell us?
3. In the model why does the return on bonds, i, equal the return on capital, (R/P) - ?
4. What is real profit in the Barro model?
5. What causes the labor and capital markets to clear in the Barro model?
6. In the Barro market-clearing model, on what variable does the interest rate depend? Explain briefly.
7. Why does the Barro model assume that the labor and capital market clear? Explain briefly.
8. In the Barro market model, why are equilibrium profits equal to zero?
Chapter 7
TRUE/FALSE
1. If the value of initial assets increases, then a household will change consumption or present value of asset at the end of period 2 due to an income effect.
2. $100 a year from now is equal in worth to $100 today.
3. A discount factor is used to deflate nominal consumption to real consumption.
4. If wages rises by $10 per worker just this period, we would expect to see consumption rise by much less than $10 this period.
5. The aggregate household budget constraint is consumption plus net investment is real GDP less depreciation.
6. In the multiyear household budget constraint, wage incomes from each year are added together without further adjustments.
7. In the multiyear household budget constraint, initial asset values are excluded.
8. An increase in the interest rate leads to an income effect and an intertemporal-substitution effect on consumption which offset each other.
9. An increase in the interest rate leads to an income effect which increases consumption and saving in year 1.
10. An increase in the interest rate leads to an intertemporal substitution effect which decreases consumption and increases saving in year 1.
MULTIPLE CHOICE
1. Real profit is zero when:
a. the interest rate is zero. c. the labor and capital markets clear.
b. the depreciation rate is high. d. the labor and capital markets do not clear.
2. When the labor and capital markets clear:
a. depreciation is zero. c. a dollar today is worth more than a dollar in the future.
b. real profit is zero. d. all of the above.
3. Real household saving is:
a. B + K c. ( B/P) + K
b. B + ( K/P) d. ( B/P) + ( K/P)
4. Real income is:
a. wL + i(B+K) c. (w/P)L + i((B/P)+(K/P))
b. (w/P)L + i((B/P)+ K) d. (w/P)L + i(B+ K)
Figure 7.1
5. In Figure 7.1 if the household opts to consume all its income it will be at point:
a. F c. H
b. G d. I
6. In Figure 7.1 if the household decides to save all of its income, it would be at point:
a. F c. H
b. G d. I
7. In Figure 7.1 if the household moves from point G to point H on its budget, it would be:
a. saving and consuming more. c. saving more and consuming less.
b. saving less and consuming more. d. saving and consuming less.
8. In Figure 7.1 if the household moves from point I to point H on its budget, it would be:
a. saving and consuming more. c. saving more and consuming less.
b. saving less and consuming more. d. saving and consuming less.
9. In Figure 7.1 if the household moves from point F to point H on its budget, it would be:
a. saving and consuming more. c. saving more and consuming less.
b. saving less and consuming more. d. saving and consuming less.
10. In Figure 7.1 if the household moves from point H to point G on its budget, it would be:
a. saving and consuming more. c. saving more and consuming less.
b. saving less and consuming more. d. saving and consuming less.
11. In Figure 7.1 if the household moves from point H to point G on its budget, it would be:
a. gaining one unit of saving and one unit of consumption. c. gaining one unit of saving for giving up five units of consumption.
b. giving up one unit of saving for one unit of consumption. d. giving up one unit of saving and five units of consumption.
12. Real saving in year one is:
a. real bonds plus capital in year 1 minus real bonds and capital in year 0. c. bonds plus capital in period 1.
b. bonds plus capital plus money period 1. d. interest times the sum of bonds plus capital in period 1.
13. The household’s year one budget constraint is:
a. real assets at the end of year zero plus real income in year one less consumption in year one equals real assets at the end of year one. c. real assets at the end of year zero plus real income in year one plus consumption in year one equals real assets at the end of year one.
b. real income in year one less real assets at the end of year zero less consumption in year one equals real assets at the end of year one. d. real income in year one plus consumption in year one less real assets at the end of year zero equals real assets at the end of year one.
14. In the one period budget constraint sources of funds include:
a. labor income. c. income from bonds.
b. income from capital. d. all of the above.
15. In the one period budget constraint sources of funds include:
a. labor income. c. capital gains.
b. interests bearing money. d. all of the above.
16. In the one period budget constraint sources of funds include:
a. capital gains. c. income from rising prices.
b. income from capital. d. all of the above.
17. In the one period budget constraint sources of funds include:
a. capital gains. c. income from bonds.
b. inflation. d. all of the above.
18. In the one period budget constraint the uses of funds include:
a. purchases of consumption goods. c. purchases of bonds.
b. purchases of capital goods. d. all of the above.
19. In the one period budget constraint the uses of funds include:
a. purchases of consumption goods. c. payment profits.
b. payment of wages. d. all of the above.
20. In the one period budget constraint the uses of funds include:
a. payment of transfers. c. payment of wages.
b. purchases of capital goods. d. all of the above.
21. In the one period budget constraint the uses of funds include:
a. payment of transfers. c. purchases of bonds.
b. payment of wages. d. all of the above.
22. The measure used to reduce future consumption to today’s values is called:
a. an implicit deflator. c. an escalator.
b. a discount factor. d. a future value.
23. When a discount factor is multiplied times a future period variable it creates a:
a. future value. c. a real variable.
b. a present value. d. a nominal variable.
24. A dollar today is worth more than a dollar a year from now as long as:
a. the interest rate is negative. c. the depreciation rate is negative.
b. the interest rate is positive. d. the depreciation rate is positive.
25. An income effect is the response of households to changes in the present value of:
a. relative prices. c. uses of funds.
b. sources of funds. d. assets at the end of year two.
26. If the interest rate is greater than zero, then the concept of present value is that a dollar today:
a. is worth more than a dollar a year from now. c. will be worthless a year from now.
b. is worth less than a dollar a year from now. d. is worth the same as a year from now.
27. If the present value of assets at the end of year two is constant, an increase in the present value of sources of funds must cause:
a. consumption in periods one and two to rise. c. consumption to rise in period one and fall in period two.
b. consumption in periods one and two to fall. d. consumption to fall in period one and rise in period two.
28. The present value of sources of funds is:
a. the value of intial assets plus the present value of wage income plus the present value of assets at the end of year two. c. the present value of wage income plus the present value of assets at the end of year two.
b. the value of initial assets plus the present value of assets at the end of year two. d. the value of intial assets plus the present value of wage income.
29. An increase in the interest rate:
a. makes consumption in period two relatively more expensive compared to consumption in period one. c. makes consumption in period two relatively cheaper compared consumption in period one.
b. does not change relative cost of consuming in either period. d. discourages savings in each period.
30. If a household consumes one less unit in period 1, they can consume:
a. on more unit in period two. c. one less unit in period two.
b. (1 + i) more units in period two. d. no more in period two.
31. Utility in economics is:
a. a product with a derived demand like electricity. c. satisfaction or happiness.
b. usefulness. d. all of the above.
32. Utility in economics:
a. used to mean happiness. c. is what a person gets from a good.
b. used to mean satisfaction. d. all of the above.
33. An increase in the interest rate can cause an income effect by:
a. making future consumption cheaper. c. making present consumption cheaper.
b. changing real income in year two. d. all of the above.
34. An increase in the interest rate:
a. makes future consumption cheaper. c. makes present consumption more expensive.
b. increases future income. d. all of the above.
35. An increase in the interest rate:
a. makes future consumption cheaper. c. makes present consumption cheaper.
b. decreases future income. d. all of the above.
36. An increase in the interest rate:
a. makes future consumption more expensive. c. makes present consumption more expensive.
b. decreases future income. d. all of the above.
37. An increase in the interest rate:
a. makes future consumption more expensive. c. makes present consumption cheaper.
b. increases future income. d. all of the above.
38. An intertemporal substitution effect is caused by a change in:
a. a price from one period to another. c. income.
b. wealth. d. all of the above.
39. The marginal propensity to save out of a temporary change in income is approximately:
a. 1 c. 0
b. 0.5 d. none of the above.
40. The marginal propensity to save out of a permanent change in income is approximately:
a. 1 c. 0
b. 0.5 d. none of the above.
41. The marginal propensity to consume out of a permanent change in income is approximately:
a. 1 c. 0
b. 0.5 d. none of the above.
42. The marginal propensity to consume out of a temporary change in income is approximately:
a. 1 c. 0
b. 0.5 d. none of the above.
43. If a worker receives a one time bonus we would expect them to:
a. save most of it. c. consume most of it.
b. refuse it. d. consume half and save half of it.
44. If a worker receives a bonus every Christmas, we would expect them to:
a. save most of it. c. consume most of it.
b. reject it. d. consume half of it and save half of it.
45. If a person wins $500 in a scratch-off lottery game, we would expect them to:
a. save most of it. c. consume most of it.
b. refuse it. d. consume half and save half of it.
46. If a worker gets a promotion that doubles their salary, with the increase in salary we would expect them to:
a. save most of it. c. consume most of it.
b. reject it. d. consume half of it and save half of it.
47. If the household budget constraint is aggregated over all household, it shows that:
a. consumption plus net investment equal net national product. c. C + K = Y - K
b. consumption plus net investment equals real GDP less depreciation. d. all of the above.
48. If the household budget constraint is aggregated over all household, it shows that:
a. consumption plus net investment equal net national product. c. C - K = Y + K.
b. consumption less net investment equals real GDP less depreciation. d. all of the above.
49. If the household budget constraint is aggregated over all household, it shows that:
a. consumption less net investment equal net national product. c. C - K = Y + K
b. consumption plus net investment equals real GDP less depreciation. d. all of the above.
50. If the household budget constraint is aggregated over all household, it shows that:
a. profit is zero. c. C + K = Y - K
b. PC+ B+P• K = + wL + i(B + PK), d. all of the above.
51. In the multi-year budget constraint the present value of consumption equals the value of initial assets plus the:
a. present value of savings. c. present value of wage incomes.
b. present value of final assets. d. the present value of time.
52. In the two-year household budget constraint, each unit of initial assets is adjusted by
a. multiplying by (1 + io). c. dividing by (1 + io).
b. multiplying by (1 + i1). d. dividing by (1 + i1).
53. In the two-year household budget constraint, each unit of labor in year 2 is adjusted by
a. multiplying by (1 + io). c. dividing by (1 + io).
b. dividing by (1 + i1). d. multiplying by (1 + i1).
54. In the two-year household budget constraint, each unit of conumption in year 2 is adjusted by
a. multiplying by (1 + io). c. dividing by (1 + i1).
b. multiplying by (1 + i1). d. dividing by (1 + i0).
55. For a household budget over two years, suppose the dollar wage rate in year 1 and year 2 equals $12, the price level in year 1 and year 2 equals 2, and the nominal interest rate in year 1 and year 2 equals 3 percent. The total present value of wage income over two years is
a. 24 c. 12
b. 12.18 d. 5.83
56. For a household budget over two years, suppose the dollar wage rate in year 1 and year 2 equals $8, the price level in year 1 and year 2 equals 2, and the nominal interest rate in year 1 and year 2 equals 3 percent. The present value of wage income in year two only is
a. 3.88 c. 4.12
b. 4 d. 5.83
57. Suppose that the present value of a household’s wage income rises. The effect on consumption most likely is
a. zero. c. more consumption in year 2 only.
b. more consumption in both year 1 and 2. d. more consumption in year 1 only.
58. An increase in the interest rate in year 1 leads to
a. an intertemporal substition effect which lowers C1 and lowers C2. c. an intertemporal substition effect which lowers C1 and raises C2.
b. an interpersonal effect which lowers C1 and lowers C2. d. an interpersonal effect which lowers C1 and lowers C2.
59. An increase in the interest rate in year 1 leads to
a. an intertemporal substition effect which raises consumption and saving in year 1. c. an intertemporal substition effect which lowers consumption and raises saving in year 1.
b. an income effect which lowers consumption and saving in year 1. d. an income effect which raises consumption and lowers saving in year 1.
60. For a 2-year household budget constraint, an increase in the interest rate in year 1 leads to which combined effect on consumption?
a. An increase in consumption in year 1. c. A decrease in consumption in year 1.
b. A decrease in consumption in year 1 and an increase in year 2. d. An ambiguous effect.
SHORT ANSWER
1. Derive the household’s two period real budget constraint.
2. What is an intertemporal substitution effect and what can cause one?
3. What is an income effect and what can cause one?
4. What are the effects of an increase in the interest rate on the choice of consumption over time?
5. Show the relationship between the household budget constraint and net national product.
6. Does an increase in permanent income affect household consumption differently than an increase in temporary income?
7. What is the marginal propensity to consume? When would you predict its value to be close to zero?
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Chapters 1 Through 6
Chapter 1: Computer Forensics and Investigations as a Profession
TRUE/FALSE
1. By the 1970s, electronic crimes were increasing, especially in the financial sector.
2. To be a successful computer forensics investigator, you must be familiar with more than one computing platform.
3. Computer investigations and forensics fall into the same category: public investigations.
4. The law of search and seizure protects the rights of all people, excluding people suspected of crimes.
5. After a judge approves and signs a search warrant, it’s ready to be executed, meaning you can collect evidence as defined by the warrant.
MULTIPLE CHOICE
1. The FBI ____ was formed in 1984 to handle the increasing number of cases involving digital evidence.
a.
Federal Rules of Evidence (FRE)
b.
Department of Defense Computer Forensics Laboratory (DCFL)
c.
DIBS
d.
Computer Analysis and Response Team (CART)
2. ____ involves recovering information from a computer that was deleted by mistake or lost during a power surge or server crash, for example.
a.
Data recovery
c.
Computer forensics
b.
Network forensics
d.
Disaster recovery
3. ____ involves preventing data loss by using backups, uninterruptible power supply (UPS) devices, and off-site monitoring.
a.
Computer forensics
c.
Disaster recovery
b.
Data recovery
d.
Network forensics
4. The ____ group manages investigations and conducts forensic analysis of systems suspected of containing evidence related to an incident or a crime.
a.
network intrusion detection
c.
incident response
b.
computer investigations
d.
litigation
5. By the early 1990s, the ____ introduced training on software for forensics investigations.
a.
IACIS
c.
CERT
b.
FLETC
d.
DDBIA
6. In the Pacific Northwest, ____ meets monthly to discuss problems that law enforcement and corporations face.
a.
IACIS
c.
FTK
b.
CTIN
d.
FLETC
7. In a ____ case, a suspect is tried for a criminal offense, such as burglary, murder, or molestation.
a.
corporate
c.
criminal
b.
civil
d.
fourth amendment
8. In general, a criminal case follows three stages: the complaint, the investigation, and the ____.
a.
litigation
c.
blotter
b.
allegation
d.
prosecution
9. Based on the incident or crime, the complainant makes a(n) ____, an accusation or supposition of fact that a crime has been committed.
a.
litigation
c.
blotter
b.
allegation
d.
prosecution
10. In a criminal or public case, if you have enough information to support a search warrant, the prosecuting attorney might direct you to submit a(n) ____.
a.
blotter
c.
litigation report
b.
exhibit report
d.
affidavit
11. It’s the investigator’s responsibility to write the affidavit, which must include ____ (evidence) that support the allegation to justify the warrant.
a.
litigation
c.
exhibits
b.
prosecution
d.
reports
12. The affidavit must be ____ under sworn oath to verify that the information in the affidavit is true.
a.
notarized
c.
recorded
b.
examined
d.
challenged
13. Published company policies provide a(n) ____ for a business to conduct internal investigations.
a.
litigation path
c.
line of allegation
b.
allegation resource
d.
line of authority
14. A ____ usually appears when a computer starts or connects to the company intranet, network, or virtual private network (VPN) and informs end users that the organization reserves the right to inspect computer systems and network traffic at will.
a.
warning banner
c.
line of authority
b.
right of privacy
d.
right banner
15. A(n) ____ is a person using a computer to perform routine tasks other than systems administration.
a.
complainant
c.
end user
b.
user banner
d.
investigator
16. Without a warning banner, employees might have an assumed ____ when using a company’s computer systems and network accesses.
a.
line of authority
c.
line of privacy
b.
right of privacy
d.
line of right
17. In addition to warning banners that state a company’s rights of computer ownership, businesses should specify a(n) ____ who has the power to conduct investigations.
a.
authorized requester
c.
line of right
b.
authority of line
d.
authority of right
18. Most computer investigations in the private sector involve ____.
a.
e-mail abuse
c.
Internet abuse
b.
misuse of computing assets
d.
VPN abuse
19. Corporations often follow the ____ doctrine, which is what happens when a civilian or corporate investigative agent delivers evidence to a law enforcement officer.
a.
silver-tree
c.
silver-platter
b.
gold-tree
d.
gold-platter
20. Your ____ as a computer investigation and forensics analyst is critical because it determines your credibility.
a.
professional policy
c.
line of authority
b.
oath
d.
professional conduct
21. Maintaining ____ means you must form and sustain unbiased opinions of your cases.
a.
confidentiality
c.
integrity
b.
objectivity
d.
credibility
COMPLETION
1. ____________________ involves obtaining and analyzing digital information for use as evidence in civil, criminal, or administrative cases.
2. The ____________________ to the U.S. Constitution (and each state’s constitution) protects everyone’s rights to be secure in their person, residence, and property from search and seizure.
3. The term ____________________ refers to large corporate computing systems that might include disparate or formerly independent systems.
4. When you work in the ____________________ group, you test and verify the integrity of standalone workstations and network servers.
5. The ____________________ provides a record of clues to crimes that have been committed previously.
MATCHING
Match each item with a statement below:
a.
Computer forensics
f.
HTCIA
b.
Network forensics
g.
Affidavit
c.
Litigation
h.
Industrial espionage
d.
Xtree Gold
i.
Line of authority
e.
Case law
1. the legal process of proving guilt or innocence in court
2. recognizes file types and retrieves lost or deleted files
3. investigates data that can be retrieved from a computer’s hard disk or other storage media
4. sworn statement of support of facts about or evidence of a crime that is submitted to a judge to request a search warrant before seizing evidence
5. allows legal counsel to use previous cases similar to the current one because the laws don’t yet exist
6. specifies who has the legal right to initiate an investigation, who can take possession of evidence, and who can have access to evidence
7. organization that exchanges information about techniques related to computer investigations and security
8. yields information about how a perpetrator or an attacker gained access to a network
9. involves selling sensitive or confidential company information to a competitor
SHORT ANSWER
1. Briefly describe the triad that makes up computer security.
2. Briefly describe the main characteristics of public investigations.
3. Briefly describe the main characteristics of private investigations.
4. What questions should an investigator ask to determine whether a computer crime was committed?
5. What are the three levels of law enforcement expertise established by CTIN?
6. What are some of the most common types of corporate computer crime?
7. What is embezzlement?
8. Briefly describe corporate sabotage.
9. What text can be used in internal warning banners?
10. Mention examples of groups that should have direct authority to request computer investigations in the corporate environment.
Chapter 2: Understanding Computer Investigations
TRUE/FALSE
1. Chain of custody is also known as chain of evidence.
2. Employees surfing the Internet can cost companies millions of dollars.
3. You cannot use both multi-evidence and single-evidence forms in your investigation.
4. Many attorneys like to have printouts of the data you have recovered, but printouts can present problems when you have log files with several thousand pages of data.
5. A bit-stream copy is a bit-by-bit duplicate of the original disk. You should use the original disk whenever possible.
MULTIPLE CHOICE
1. The ____ is the route the evidence takes from the time you find it until the case is closed or goes to court.
a.
acquisition plan
c.
evidence path
b.
chain of custody
d.
evidence custody
2. When preparing a case, you can apply ____ to problem solving.
a.
standard programming rules
c.
standard systems analysis steps
b.
standard police investigation
d.
bottom-up analysis
3. The list of problems you normally expect in the type of case you are handling is known as the ____.
a.
standard risk assessment
c.
standard problems form
b.
chain of evidence
d.
problems checklist form
4. The basic plan for your investigation includes gathering the evidence, establishing the ____, and performing the forensic analysis.
a.
risk assessment
c.
chain of custody
b.
nature of the case
d.
location of the evidence
5. A(n) ____ helps you document what has and has not been done with both the original evidence and forensic copies of the evidence.
a.
evidence custody form
c.
initial investigation form
b.
risk assessment form
d.
evidence handling form
6. Use ____ to secure and catalog the evidence contained in large computer components.
a.
Hefty bags
c.
paper bags
b.
regular bags
d.
evidence bags
7. ____ prevents damage to the evidence as you transport it to your secure evidence locker, evidence room, or computer lab.
a.
An antistatic wrist band
c.
An antistatic pad
b.
Padding
d.
Tape
8. ____ investigations typically include spam, inappropriate and offensive message content, and harassment or threats.
a.
VPN
c.
E-mail
b.
Internet
d.
Phone
9. To conduct your investigation and analysis, you must have a specially configured personal computer (PC) known as a ____.
a.
mobile workstation
c.
forensic lab
b.
forensic workstation
d.
recovery workstation
10. You can use ____ to boot to Windows without writing any data to the evidence disk.
a.
a SCSI boot up disk
c.
a write-blocker
b.
a Windows boot up disk
d.
Windows XP
11. To begin conducting an investigation, you start by ____ the evidence using a variety of methods.
a.
copying
c.
opening
b.
analyzing
d.
reading
12. A ____ is a bit-by-bit copy of the original storage medium.
a.
preventive copy
c.
backup copy
b.
recovery copy
d.
bit-stream copy
13. A bit-stream image is also known as a(n) ____.
a.
backup copy
c.
custody copy
b.
forensic copy
d.
evidence copy
14. To create an exact image of an evidence disk, copying the ____ to a target work disk that’s identical to the evidence disk is preferable.
a.
removable copy
c.
bit-stream image
b.
backup copy
d.
backup image
15. ____ from Technology Pathways is a forensics data analysis tool. You can use it to acquire and analyze data from several different file systems.
a.
Guidance EnCase
c.
DataArrest SnapCopy
b.
NTI SafeBack
d.
ProDiscover Basic
16. Forensics tools such as ____ can retrieve deleted files for use as evidence.
a.
ProDiscover Basic
c.
FDisk
b.
ProDelete
d.
GainFile
17. When analyzing digital evidence, your job is to ____.
a.
recover the data
c.
copy the data
b.
destroy the data
d.
load the data
18. ____ can be the most time-consuming task, even when you know exactly what to look for in the evidence.
a.
Evidence recovery
c.
Data analysis
b.
Data recovery
d.
Evidence recording
19. When you write your final report, state what you did and what you ____.
a.
did not do
c.
wanted to do
b.
found
d.
could not do
20. In any computing investigation, you should be able to repeat the steps you took and produce the same results. This capability is referred to as ____.
a.
checked values
c.
evidence backup
b.
verification
d.
repeatable findings
21. After you close the case and make your final report, you need to meet with your department or a group of fellow investigators and ____.
a.
critique the case
c.
present the case
b.
repeat the case
d.
read the final report
COMPLETION
1. When you are dealing with password protected files, you might need to acquire ____________________ or find an expert who can help you crack the passwords.
2. During the ____________________ design or approach to the case, you outline the general steps you need to follow to investigate the case.
3. A(n) ____________________ lists each piece of evidence on a separate page.
4. A(n) ____________________ is usually conducted to collect information from a witness or suspect about specific facts related to an investigation.
5. A(n) ____________________ is where you conduct your investigations and where most of your equipment and software are located, including the secure evidence containers.
MATCHING
Match each item with a statement below
a.
FTK’s Internet Keyword Search
f.
Norton DiskEdit
b.
Data recovery
g.
MS-DOS 6.22
c.
Free space
h.
Multi-evidence form
d.
Interrogation
i.
Self-evaluation
e.
Forensic workstation
1. an essential part of professional growth
2. extracts all related e-mail address information for Web-based e-mail investigations
3. process of trying to get a suspect to confess to a specific incident or crime
4. a type of evidence custody form
5. also known as a computer forensics workstation
6. is the more well-known and lucrative side of the computer forensics business
7. can be used for new files that are saved or files that expand as data is added to them
8. the least intrusive (in terms of changing data) Microsoft operating system
9. an older computer forensics tool
SHORT ANSWER
1. What should you do to handle evidence contained in large computer components?
2. What is required to conduct an investigation involving Internet abuse?
3. What is required to conduct an investigation involving e-mail abuse?
4. What are the differences between computer forensics and data recovery?
5. Describe some of the technologies used with hardware write-blocker devices. Identify some of the more commonly used vendors and their products.
6. What are the items you need when setting up your workstation for computer forensics?
7. What additional items are useful when setting up a forensic workstation?
8. What items are needed when gathering the resources you identified in your investigation plan?
9. Describe the process of creating a bit-stream copy of an evidence disk.
10. Mention six important questions you should ask yourself when critiquing your work.
Chapter 3: The Investigator's Office and Laboratory
TRUE/FALSE
1. Performing a forensic analysis of a disk 200 GB or larger can take several days and often involves running imaging software overnight and on weekends.
2. Requirements for taking the EnCE certification exam depend on taking the Guidance Software EnCase training courses.
3. If damage occurs to the floor, walls, ceilings, or furniture on your computer forensics lab, it does not need to be repaired immediately.
4. A good working practice is to use less powerful workstations for mundane tasks and multipurpose workstations for the higher-end analysis tasks.
5. Computing systems in a forensics lab should be able to process typical cases in a timely manner.
MULTIPLE CHOICE
1. A ____is where you conduct your investigations, store evidence, and do most of your work.
a.
forensic workstation
c.
storage room
b.
computer forensics lab
d.
workbench
2. Lab costs can be broken down into daily, ____, and annual expenses.
a.
weekly
c.
bimonthly
b.
monthly
d.
quarterly
3. ____ are generated at the federal, state, and local levels to show the types and frequency of crimes committed.
a.
HTCN reports
c.
Uniform crime reports
b.
IDE reports
d.
ASCLD reports
4. Windows hard disks can now use a variety of file systems, including FAT16, FAT32, ____, and Windows File System.
a.
NTFS
c.
FAT24
b.
ext3
d.
ext2
5. ____ was created by police officers who wanted to formalize credentials in computing investigations.
a.
HTCN
c.
TEMPEST
b.
NISPOM
d.
IACIS
6. IACIS requires recertification every ____ years to demonstrate continuing work in the field of computer forensics.
a.
2
c.
4
b.
3
d.
5
7. What HTCN certification level requires candidates have three years of investigative experience in any discipline from law enforcement or corporate or have a college degree with one year of experience in investigations?
a.
Certified Computer Crime Investigator, Basic Level
b.
Certified Computer Crime Investigator, Advanced Level
c.
Certified Computer Forensic Technician, Basic
d.
Certified Computer Forensic Technician, Advanced
8. To preserve the integrity of evidence data, your lab should function as an evidence locker or safe, making it a ____or a secure storage safe.
a.
secure workstation
c.
protected PC
b.
secure workbench
d.
secure facility
9. The EMR from a computer monitor can be picked up as far away as ____ mile.
a.
1/4
c.
3/4
b.
1/2
d.
1
10. Defense contractors during the Cold War were required to shield sensitive computing systems and prevent electronic eavesdropping of any computer emissions. The U.S. Department of Defense calls this special computer-emission shielding ____.
a.
TEMPEST
c.
NISPOM
b.
RAID
d.
EMR
11. A secure storage container or cabinet should be made of ____ and include an internal cabinet lock or external padlock.
a.
gypsum
c.
wood
b.
steel
d.
expanded metal
12. Floors and carpets on your computer forensic lab should be cleaned at least ____ a week to help minimize dust that can cause static electricity.
a.
once
c.
three times
b.
twice
d.
four times
13. One way to investigate older and unusual computing systems is to keep track of ____ that still use these systems.
a.
AICIS lists
c.
SIGs
b.
uniform reports
d.
Minix
14. A ____ plan also specifies how to rebuild a forensic workstation after it has been severely contaminated by a virus from a drive you’re analyzing.
a.
disaster recovery
c.
configuration management
b.
risk management
d.
security
15. You should have at least one copy of your backups on site and a duplicate copy or a previous copy of your backups stored in a safe ____ facility.
a.
in-site
c.
off-site
b.
storage
d.
online
16. In addition to performing routine backups, record all the updates you make to your workstation by using a process called ____ when planning for disaster recovery.
a.
configuration management
c.
recovery logging
b.
risk assessment
d.
change management
17. For labs using high-end ____ servers (such as Digital Intelligence F.R.E.D.C. or F.R.E.D.M.), you must consider methods for restoring large data sets.
a.
RAID
c.
WAN
b.
ISDN
d.
TEMPEST
18. ____involves determining how much risk is acceptable for any process or operation, such as replacing equipment.
a.
Risk configuration
c.
Configuration management
b.
Change management
d.
Risk management
19. Computing components are designed to last 18 to ____ months in normal business operations.
a.
24
c.
36
b.
30
d.
42
20. In the ____, you justify acquiring newer and better resources to investigate computer forensics cases.
a.
risk evaluation
c.
configuration plan
b.
business case
d.
upgrade policy
21. By using ____ to attract new customers or clients, you can justify future budgets for the lab’s operation and staff.
a.
pricing
c.
budgeting
b.
marketing
d.
changing
COMPLETION
1. The ______________________________ provides guidelines for managing a forensics lab and for acquiring official crime-lab certification.
2. The lab ____________________ sets up processes for managing cases and reviews them regularly.
3. For daily work production, several examiners can work together in a large open area, as long as they all have ____________________ level of authority and access need.
4. ____________________ Chapter 5, Section 3 (http://nsi.org/Library/Govt/Nispom.html) describes the characteristics of a safe storage container.
5. A(n) ____________________ plan ensures that you can restore your workstations and file servers to their original condition if a catastrophic failure occurs.
MATCHING
Match each item with a statement below
a.
FireWire
f.
SIG
b.
Guidance Software
g.
MAN
c.
Business case
h.
Norton Ghost
d.
F.R.E.D.C.
i.
Disaster recovery plan
e.
ASCLD/LAB
1. sponsors the EnCE certification program
2. a high-end RAID server from Digital Intelligence
3. a plan you can use to sell your services to your management or clients
4. stands for Metropolitan Area Network
5. tool for directly restoring files
6. addresses how to restore a workstation you reconfigured for a specific investigation
7. ruled by the IEEE 1394B standard
8. can be a valuable source of support for recovering and analyzing uncommon systems
9. certification program that regulates how crime labs are organized and managed
SHORT ANSWER
1. What are the duties of a lab manager?
2. Provide a brief explanation of how to plan a lab budget.
3. What are the four levels of certification offered by HTCN?
4. What are the minimum requirements for a computer investigation and forensics lab?
5. Illustrate a proper way of disposing materials on your computer investigation lab.
6. Give a brief explanation of a computer forensics lab auditing process.
7. Briefly outline the process of selecting workstations for a police computer investigation lab.
8. What peripheral devices should be stocked in your computer forensics lab?
9. Discuss the use of a laptop PC as a forensic workstation.
10. What are the questions you need to ask when planning the justification step of a business case?
Chapter 4: Data Acquisition
TRUE/FALSE
1. One advantage with live acquisitions is that you are able to perform repeatable processes.
2. The most common and time-consuming technique for preserving evidence is creating a duplicate copy of your evidence image file.
3. Many acquisition tools don’t copy data in the host protected area (HPA) of a disk drive.
4. FTK Imager requires that you use a device such as a USB or parallel port dongle for licensing.
5. Unlike RAID 0, RAID 3 stripes tracks across all disks that make up one volume.
MULTIPLE CHOICE
1. For computer forensics, ____ is the task of collecting digital evidence from electronic media.
a.
hashing
c.
lossy compression
b.
data acquisition
d.
lossless compression
2. One major disadvantage of ____ format acquisitions is the inability to share an image between different vendors’ computer forensics analysis tools.
a.
proprietary
c.
AFF
b.
raw
d.
AFD
3. Typically, a(n) ____ acquisition is done on a computer seized during a police raid, for example.
a.
live
c.
real-time
b.
online
d.
static
4. If the computer has an encrypted drive, a ____ acquisition is done if the password or passphrase is available.
a.
passive
c.
live
b.
static
d.
local
5. The most common and flexible data-acquisition method is ____.
a.
Disk-to-disk copy
c.
Disk-to-image file copy
b.
Disk-to-network copy
d.
Sparse data copy
6. SafeBack and SnapCopy must run from a(n) ____ system.
a.
UNIX
c.
Linux
b.
MS-DOS
d.
Solaris
7. If your time is limited, consider using a logical acquisition or ____ acquisition data copy method.
a.
lossless
c.
sparse
b.
disk-to-disk
d.
disk-to-image
8. Image files can be reduced by as much as ____% of the original.
a.
15
c.
30
b.
25
d.
50
9. Microsoft has recently added ____ in its Vista Ultimate and Enterprise editions, which makes performing static acquisitions more difficult.
a.
whole disk encryption
c.
recovery wizards
b.
backup utilities
d.
NTFS
10. Linux ISO images are referred to as ____.
a.
ISO CDs
c.
Forensic Linux
b.
Live CDs
d.
Linux in a Box
11. The ____ command displays pages from the online help manual for information on Linux commands and their options.
a.
cmd
c.
inst
b.
hlp
d.
man
12. The ____ command creates a raw format file that most computer forensics analysis tools can read, which makes it useful for data acquisitions.
a.
fdisk
c.
man
b.
dd
d.
raw
13. The ____ command, works similarly to the dd command but has many features designed for computer forensics acquisitions.
a.
raw
c.
dcfldd
b.
bitcopy
d.
man
14. Current distributions of Linux include two hashing algorithm utilities: md5sum and ____.
a.
rcsum
c.
hashsum
b.
shasum
d.
sha1sum
15. The ____ DOS program En.exe requires using a forensic MS-DOS boot floppy or CD and a network crossover cable.
a.
ProDiscover
c.
DIBS USA
b.
ILook
d.
EnCase
16. EnCase Enterprise is set up with an Examiner workstation and a Secure Authentication for EnCase (____) workstation
a.
ILook
c.
Incident Response
b.
SAFE
d.
Investigator
17. SnapBack DatArrest runs from a true ____ boot floppy.
a.
UNIX
c.
Mac OS X
b.
Linux
d.
MS-DOS
18. SnapBack DatArrest can perform a data copy of an evidence drive in ____ ways.
a.
two
c.
four
b.
three
d.
five
19. ____ is the only automated disk-to-disk tool that allows you to copy data to a slightly smaller target drive than the original suspect’s drive.
a.
SafeBack
c.
SnapCopy
b.
EnCase
d.
SMART
20. SafeBack performs a(n) ____ calculation for each sector copied to ensure data integrity
a.
SHA-1
c.
SHA-256
b.
MC5
d.
MC4
21. ____ has developed the Rapid Action Imaging Device (RAID) to make forensically sound disk copies.
a.
DIBS USA
c.
ProDiscover
b.
EnCase
d.
ILook
COMPLETION
1. Bit-stream data to files copy technique creates simple sequential flat files of a suspect drive or data set. The output of these flat files is referred to as a(n) ____________________ format.
2. ____________________ is the default format for acquisitions for Guidance Software EnCase.
3. Popular archiving tools, such as PKZip and WinZip, use an algorithm referred to as ____________________ compression.
4. Dr. Simson L. Garfinkel of Basis Technology Corporation recently developed a new open-source acquisition format called ____________________.
5. There are two types of acquisitions: static acquisitions and ____________________ acquisitions.
MATCHING
Match each item with a statement below
a.
SafeBack
f.
fdisk -l
b.
WinZip
g.
Lossy compression
c.
Data acquisition
h.
Jaz disk
d.
AFF
i.
EnCase
e.
IXimager
1. shows the known drives connected to your computer
2. forensic tool developed by Guidance Software
3. example of a disk-to-disk copy maker tool
4. open source data acquisition format
5. used with .jpeg files to reduce file size and doesn’t affect image quality when the file is restored and viewed
6. ILook imaging tool
7. process of copying data
8. type of SCSI drive
9. example of a lossless compression tool
SHORT ANSWER
1. What are the advantages and disadvantages of using raw data acquisition format?
2. What are some of the features offered by proprietary data acquisition formats?
3. What are some of the design goals of AFF?
4. Explain the sparse data copy method for acquiring digital evidence.
5. What are the considerations you should have when deciding what data-acquisition method to use on your investigation?
6. Explain the use of hash algorithms to verify the integrity of lossless compressed data.
7. What are the advantages and disadvantages of using Windows acquisition tools?
8. What are the steps to update the Registry for Windows XP SP2 to enable write-protection with USB devices?
9. What are some of the main characteristics of Linux ISO images designed for computer forensics?
10. What are the requirements for acquiring data on a suspect computer using Linux?
Chapter 5: Processing Crime and Incident Scenes
TRUE/FALSE
1. ISPs can investigate computer abuse committed by their customers.
2. If a corporate investigator follows police instructions to gather additional evidence without a search warrant after you have reported the crime, you run the risk of becoming an agent of law enforcement.
3. A judge can exclude evidence obtained from a poorly worded warrant.
4. The reason for the standard practice of securing an incident or crime scene is to expand the area of control beyond the scene’s immediate location.
5. Corporate investigators always have the authority to seize all computers equipments during a corporate investigation.
MULTIPLE CHOICE
1. Most federal courts have interpreted computer records as ____ evidence.
a.
conclusive
c.
hearsay
b.
regular
d.
direct
2. Generally, computer records are considered admissible if they qualify as a ____ record.
a.
hearsay
c.
computer-generated
b.
business
d.
computer-stored
3. ____ records are data the system maintains, such as system log files and proxy server logs.
a.
Computer-generated
c.
Computer-stored
b.
Business
d.
Hearsay
4. The FOIA was originally enacted in the ____.
a.
1940s
c.
1960s
b.
1950s
d.
1970s
5. Investigating and controlling computer incident scenes in the corporate environment is ____ in the criminal environment.
a.
much ��easier than
c.
as difficult as
b.
as easy as
d.
more difficult than
6. Every business or organization must have a well defined process that describes when an investigation can be initiated. At a minimum, most corporate policies require that employers have a ____ that a law or policy is being violated.
a.
confirmed suspicion
c.
court order stating
b.
proof
d.
reasonable suspicion
7. Confidential business data included with the criminal evidence are referred to as ____ data.
a.
commingled
c.
public
b.
exposed
d.
revealed
8. ____ is facts or circumstances that would lead a reasonable person to believe a crime has been committed or is about to be committed.
a.
Reasonable cause
c.
A subpoena
b.
Probable cause
d.
A warrant
9. Law enforcement investigators need a(n) ____ to remove computers from a crime scene and transport them to a lab.
a.
evidence custody form
c.
affidavit
b.
FOIA form
d.
warrant
10. Environmental and ____ issues are your primary concerns when you’re working at the scene to gather information about an incident or a crime.
a.
legal
c.
corporate
b.
safety
d.
physical
11. When recovering evidence from a contaminated crime scene, if the temperature in the contaminated room is higher than ____ degrees, you should take measures to prevent a hard disk from overheating to prevent damage.
a.
80
c.
95
b.
90
d.
105
12. With a(n) ____ you can arrive at a scene, acquire the data you need, and return to the lab as quickly as possible.
a.
bit-stream copy utility
c.
initial-response field kit
b.
extensive-response field kit
d.
seizing order
13. A(n) ____should include all the tools you can afford to take to the field.
a.
initial-response field kit
c.
forensic lab
b.
extensive-response field kit
d.
forensic workstation
14. Courts consider evidence data in a computer as ____ evidence.
a.
physical
c.
virtual
b.
invalid
d.
logical
15. Evidence is commonly lost or corrupted through ____, which involves police officers and other professionals who aren’t part of the crime scene processing team.
a.
onlookers
c.
FOIA laws
b.
HAZMAT teams
d.
professional curiosity
16. When seizing computer evidence in criminal investigations, follow the ____ standards for seizing digital data.
a.
Homeland Security Department
c.
U.S. DoJ
b.
Patriot Act
d.
U.S. DoD
17. During an investigation involving a live computer, do not cut electrical power to the running system unless it’s an older ____ or MS-DOS system.
a.
Windows XP
c.
Windows NT
b.
Windows 9x
d.
Windows Me
18. Certain files, such as the ____ and Security log in Windows XP, might lose essential network activity records if the power is terminated without a proper shutdown.
a.
Password log
c.
Io.sys
b.
Word log
d.
Event log
19. One technique for extracting evidence from large systems is called ____.
a.
RAID copy
c.
large evidence file recovery
b.
RAID imaging
d.
sparse acquisition
20. Real-time surveillance requires ____data transmissions between a suspect’s computer and a network server.
a.
poisoning
c.
blocking
b.
sniffing
d.
preventing
21. The most common computer-related crime is ____.
a.
homicide
c.
car stealing
b.
check fraud
d.
sniffing
COMPLETION
1. _____________________ can be any information stored or transmitted in digital form.
2. Private-sector organizations include businesses and _________________________ that aren’t involved in law enforcement.
3. If a company does not publish a policy stating that it reserves the right to inspect computing assets at will or display a warning banner, employees have a(n) _________________________.
4. When an investigator finds a mix of information, judges often issue a(n) _________________________to the warrant, which allows the police to separate innocent information from evidence.
5. Some computer cases involve dangerous settings. For these types of investigations, you must rely on the skills of _________________________ teams to recover evidence from the scene.
MATCHING
Match each item with a statement below
a.
Innocent information
f.
Low-level investigations
b.
AFIS
g.
Hearsay
c.
EnCase Enterprise Edition
h.
Spector
d.
FOIA
i.
HAZMAT
e.
IOCE
1. covert surveillance product
2. you should rely on this when dealing with a terrorist attack
3. secondhand or indirect evidence, such as an overheard conversation
4. what most cases in the corporate environment are considered
5. agencies must comply with these laws and make documents they find and create available as public records
6. sets standards for recovering, preserving, and examining digital evidence
7. fingerprints can be tested with these systems
8. information unrelated to a computing investigation case
9. a data-collecting tool
SHORT ANSWER
1. Why should companies publish a policy stating their right to inspect computing assets at will?
2. Illustrate with an example the problems caused by commingled data.
3. Briefly describe the process of obtaining a search warrant.
4. What is the plain view doctrine?
5. How can you determine who is in charge of an investigation?
6. Describe the process of preparing an investigation team.
7. How can you secure a computer incident or crime scene?
8. Give some guidelines on how to video record a computer incident or crime scene.
9. Describe how to use a journal when processing a major incident or crime scene.
10. What should you do when working on an Internet investigation and the suspect’s computer is on?
Chapter 6: Working with Windows and DOS Systems
TRUE/FALSE
1. The type of file system an OS uses determines how data is stored on the disk.
2. One way to examine a partition’s physical level is to use a disk editor, such as Norton DiskEdit, WinHex, or Hex Workshop.
3. As data is added, the MFT can expand to take up 75% of the NTFS disk.
4. The first 5 bytes (characters) for all MFT records are MFTR0.
5. Data streams can obscure valuable evidentiary data, intentionally or by coincidence.
MULTIPLE CHOICE
1. A ____ is a column of tracks on two or more disk platters.
a.
cylinder
c.
track
b.
sector
d.
head
2. ____ is how most manufacturers deal with a platter’s inner tracks being shorter than its outer tracks.
a.
Head skew
c.
ZBR
b.
Cylinder skew
d.
Areal density
3. ____ refers to the number of bits in one square inch of a disk platter.
a.
Head skew
c.
Cylinder skew
b.
Areal density
d.
ZBR
4. ____ is the file structure database that Microsoft originally designed for floppy disks.
a.
NTFS
c.
VFAT
b.
FAT32
d.
FAT
5. ____ was introduced when Microsoft created Windows NT and is the primary file system for Windows Vista.
a.
FAT32
c.
NTFS
b.
VFAT
d.
HPFS
6. On an NTFS disk, immediately after the Partition Boot Sector is the ____.
a.
FAT
c.
MBR
b.
HPFS
d.
MFT
7. Records in the MFT are referred to as ____.
a.
hyperdata
c.
inodes
b.
metadata
d.
infodata
8. In the NTFS MFT, all files and folders are stored in separate records of ____ bytes each.
a.
1024
c.
2048
b.
1512
d.
2512
9. The file or folder’s MFT record provides cluster addresses where the file is stored on the drive’s partition. These cluster addresses are referred to as ____.
a.
virtual runs
c.
metaruns
b.
metada
d.
data runs
10. When Microsoft introduced Windows 2000, it added built-in encryption to NTFS called ____.
a.
EFS
c.
LZH
b.
VFAT
d.
RAR
11. The purpose of the ____ is to provide a mechanism for recovering encrypted files under EFS if there’s a problem with the user’s original private key.
a.
certificate escrow
c.
administrator certificate
b.
recovery certificate
d.
root certificate
12. When Microsoft created Windows 95, it consolidated initialization (.ini) files into the ____.
a.
IniRecord
c.
Registry
b.
Inidata
d.
Metadata
13. ____, located in the root folder of the system partition, specifies the Windows XP path installation and contains options for selecting the Windows version.
a.
Boot.ini
c.
NTDetect.com
b.
BootSec.dos
d.
NTBootdd.sys
14. ____ is a 16-bit real-mode program that queries the system for device and configuration data, and then passes its findings to NTLDR.
a.
Hal.dll
c.
NTDetect.com
b.
Boot.ini
d.
BootSect.dos
15. ____, located in the root folder of the system partition, is the device driver that allows the OS to communicate with SCSI or ATA drives that aren’t related to the BIOS.
a.
Hal.dll
c.
Boot.ini
b.
NTBootdd.sys
d.
Ntoskrnl.exe
16. ____ contain instructions for the OS for hardware devices, such as the keyboard, mouse, and video card, and are stored in the %system-root%\Windows\System32\Drivers folder.
a.
Hal.dll
c.
Ntoskrnl.exe
b.
Pagefile.sys
d.
Device drivers
17. ____ is a hidden text file containing startup options for Windows 9x.
a.
Pagefile.sys
c.
Msdos.sys
b.
Hal.dll
d.
Ntoskrnl.exe
18. The ____ file provides a command prompt when booting to MS-DOS mode (DPMI).
a.
Io.sys
c.
Config.sys
b.
Autoexec.bat
d.
Command.com
19. ____ is a text file containing commands that typically run only at system startup to enhance the computer’s DOS configuration.
a.
Autoexec.bat
c.
BootSect.dos
b.
Config.sys
d.
Io.sys
20. ____ is a batch file containing customized settings for MS-DOS that runs automatically.
a.
Autoexec.bat
c.
Io.sys
b.
Config.sys
d.
Command.com
21. A ____ allows you to create a representation of another computer on an existing physical computer.
a.
virtual file
c.
logic machine
b.
logic drive
d.
virtual machine
COMPLETION
1. ____________________ refers to a disk’s structure of platters, tracks, and sectors.
2. In Microsoft file structures, sectors are grouped to form ____________________, which are storage allocation units of one or more sectors.
3. On Windows and DOS computer systems, the ____________________ stores information about partitions on a disk and their locations, size, and other important items.
4. Drive slack includes RAM slack (found primarily in older Microsoft OSs) and ____________________ slack.
5. On an NTFS disk, the first data set is the ____________________, which starts at sector [0] of the disk.
MATCHING
Match each item with a statement below:
a.
File system
f.
NTFS
b.
Tracks
g.
Unicode
c.
Track density
h.
Data streams
d.
Partition gap
i.
BitLocker
e.
Drive slack
1. Microsoft’s move toward a journaling file system
2. the space between each track
3. ways data can be appended to existing files
4. the unused space between partitions
5. an international data format
6. Microsoft’s utility for protecting drive data
7. gives an OS a road map to data on a disk
8. unused space in a cluster between the end of an active file and the end of the cluster
9. concentric circles on a disk platter where data is located
SHORT ANSWER
1. How can you make sure a subject’s computer boots to a forensic floppy disk or CD?
2. What are some of the components of a disk drive?
3. How are disk clusters numbered by Microsoft file structures?
4. Summarize the evolution of FAT versions.
5. Briefly describe how to delete FAT files.
6. What are logical cluster numbers (LCNs)?
7. Briefly explain NTFS compressed files.
8. What are some of the features offered by current whole disk encryption tools?
9. What are BitLocker’s current hardware and software requirements?
10. Describe some of the open source whole disk encryption tools.
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CIS 562 Week 5 Assignment 2 – Strayer NEW
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Assignment 2: Data Acquisition Lecture
This assignment consists of two (2) parts: a written paper and a PowerPoint presentation. You must submit both parts as separate files for the completion of this assignment. Label each file name according to the section of the assignment it is written for. Additionally, you may create and / or assume all necessary assumptions needed for the completion of this assignment.
Imagine you’ve been sought out as a guest lecturer at a local university for a computer forensics course. You have been asked to prepare a paper for the students, as well as a PowerPoint presentation, regarding data acquisition in a forensics investigation.
Part 1: Written Paper
1. Write a four to five (4-5) page paper in which you:
a. Analyze the four (4) methods of data acquisition to determine how an investigator selects the appropriate method to use in a given situation.
b. Determine how an investigator can plan for hardware, software, and / or general failures during data acquisition.
c. Justify the necessity of validating data acquisition and determine the negative effects on an investigation if this step is not performed.
d. Describe the acquisition procedures and tools for Windows and Linux data acquisitions.
e. Use at least three (3) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.
Part 2: PowerPoint Presentation
Use Microsoft PowerPoint or an open source alternative, such as OpenOffice, to:
2. Create a five to ten (5-10) slide PowerPoint presentation in which you:
a. Summarize the concepts from your written paper in Part 1 of this assignment for the lecture you would give to the class regarding data acquisition in a forensics investigation.
b. Use a professional technically written style to graphically convey the information.
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CIS 524 Week 5 Discussion Questions – Strayer
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Week 5 DQ 1
"Command and Natural Language" Please respond to the following:
· The president of your company approached you with his iPhone in one hand and his iPad in the other. He has just purchased the iPhone 4S and is fascinated with Siri, the voice recognition software. He then pulls up an app your team developed for the company a few months ago and tells you that he wants it to work with voice commands just like Siri. When you pass this information on to your team, the news is met with groans and angry expressions. One of your developers tells you that it would be way too complicated to add voice recognition into the app and that you should have said no. Suggest three techniques to overcome the challenges of implementing natural language into interface designs.
· Sally, a young developer, requests a meeting with you to discuss a project. Sally tells you that she wants to develop a new application in a computer language she has developed, hoping to use the project as proof of concept for her newly developed language. Your firm encourages technological development and advancement and has allowed similar developments to happen in the past. Discuss with Sally what is required to be considered an effective computer language. Suggest three characteristics that make up an effective computer language. Support your response with evidence from the textbook or an article you found.
Week 5 DQ 2
"Developing Commands" Please respond to the following:
· You have just finished reviewing a design project your team has submitted to you and noticed that the team members used a great deal of command abbreviations. Explain to your team the value of using abbreviations for commands and give them at least two advantages and disadvantages associated with using abbreviations. Support your answer.
· From the e-Activity, Amore’s and Quesada’s article discusses the challenges of incorporating Natural Command Language Dialogs (NCLDs) into a phone system. One challenge pertains to sources of conflict in NCLDs. Discuss potential sources of conflict with an interface that you frequently use and devise a solution for preventing the conflicts.
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CIS 521 Week 5 Assignment 4 – Strayer New
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Assignment 4: When Hackers Turn to Blackmail
Read “When Hackers Turn to Blackmail.” (Harvard Business Review) available at the Strayer University online library. Then, write a two to three (2–3) page paper on the following case study:
1. Identify and analyze the issues presented in this case.
2. Determine whether the issues can be solved by an EA-SOA framework and explain why or why not.
3. Discuss the lessons learned from this experience.
4. Discuss how those lessons could contribute to the future planning of an EA-SOA project.
The format of the paper is to be as follows:
o Typed, double-spaced, Times New Roman font (size 12), one-inch margins on all sides (APA format).
o Use headers for each of the subjects being covered, followed by your response.
o In addition to the two to three (2–3) pages required, a title page is to be included. The title page is to contain the title of the assignment, your name, the instructor’s name, the course title, and the date.
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CIS 519 Midterm and Final Exam – Strayer NEW
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Chapter 1 Through 14
Chapter 1 Decision Support Systems and Business Intelligence
1) When faced with a turbulent business environment, organizations are best able to survive or even excel by minimizing changes until the environment stabilizes.
Diff: 2 Page Ref: 2
2) The management of Norfolk Southern, a large freight railroad company, invested in data warehousing technologies. Even though railroad transportation is a mature industry, Norfolk Southern gained a competitive advantage by using its data warehousing technologies to squeeze additional efficiency from its operations.
Diff: 2 Page Ref: 4
3) Globalization has significantly reduced the complexity of the business environment. For example, companies can find suppliers and customers in many countries where materials are cheaper, which reduces competition and complexity.
Diff: 3 Page Ref: 5
4) One of the major objectives of computerized decision support is to minimize the gap between the current performance of an organization and its desired performance.
Diff: 2 Page Ref: 6
5) One measure of productivity is the ratio of inputs to outputs.
Diff: 2 Page Ref: 7
6) Managers, especially those at high managerial levels, are primarily hands-on problem solvers.
Diff: 2 Page Ref: 7
7) Because managerial decision making is complex, it is more important to emphasize methodical, analytical decision making rather than interpersonal communication skills.
Diff: 3 Page Ref: 7
8) Government regulations, political instability, competition, and changing consumer demands cause uncertainty that makes it difficult to predict the consequences of a decision.
Diff: 2 Page Ref: 8
9) Computer applications have progressed from transaction processing and monitoring to problem analysis and solution applications, and much of the activity is supported by spreadsheet technologies.
Diff: 2 Page Ref: 9
10) Computerized systems enable people to overcome their cognitive limits by quickly accessing and processing vast amounts of stored information.
Diff: 2 Page Ref: 10
11) Accounts receivable and accounts payable processes are highly structured, which makes them easy to program.
Diff: 2 Page Ref: 11
12) Research and development (R & D) planning and social responsibility planning are unstructured decisions, which cannot be supported by computerized decision support systems.
Diff: 3 Page Ref: 11
13) The first phase in the decision-making process is design which involves inventing, developing, and analyzing possible alternative courses of action or solutions.
Diff: 2 Page Ref: 12
14) Automated decision systems (ADS) are rule-based systems that provide solutions to repetitive managerial problems, usually in one functional area (e.g., finance, manufacturing).
Diff: 3 Page Ref: 14
15) The term Decision Support Systems (DSS) can be used as an umbrella term to describe any computerized system that supports decision making in an organization.
Diff: 1 Page Ref: 16
16) The two major DSS types are the model-oriented DSS, in which quantitative models are used to generate a recommended solution to a problem, and data-oriented DSS, which support ad hoc reporting and queries.
Diff: 2 Page Ref: 17
17) A BI system has three major components: a data warehouse with source data; business performance management (BPM) for monitoring and analyzing performance; and a user interface such as a dashboard.
Diff: 2 Page Ref: 20
18) Most DSS are constructed to directly support specific decision making. In contrast, BI systems, in general typically provide accurate and timely information to support decision support indirectly. This difference is diminishing because decision support tools are being added to BI software packages.
Diff: 3 Page Ref: 24
19) Dashboards and information portals are data visualization tools.
Diff: 2 Page Ref: 26
20) The objective of computerized decision support, regardless of its name or nature, is to help managers solve problems and assess opportunities faster and better than would be possible without computers.
Diff: 2 Page Ref: 27
21) Norfolk Southern Railroad built a ________ application that pulls data from the data warehouse and then graphically depicts actual performance against planned performance.
A) dashboard
B) graphical interface
C) transaction processing
D) forecasting
Diff: 2 Page Ref: 3
22) Norfolk Southern Railroad invested in a Teradata ________, which is a central repository of historical data that is organized for easy access and manipulation to support decision making.
A) database
B) data warehouse
C) data repository
D) data disk
Diff: 2 Page Ref: 3
23) Numerous types of business ________ result from today's business climate.
A) decisions
B) responses
C) support
D) pressures
Diff: 1 Page Ref: 5
24) Companies are facing each of the following impacts of globalization except:
A) Easier to find suppliers and customers in many countries
B) Less complex business environment
C) Cheaper materials
D) More and stronger competitors
Diff: 2 Page Ref: 5
25) Which of the following is an organizational response to a business environmental factor?
A) customer demand
B) government regulations
C) new business models
D) globalization
Diff: 3 Page Ref: 5
26) Business environment factors that create pressures on organizations include all of the following except:
A) workforce that is younger and shrinking
B) need for real-time, on-demand transactions
C) booming electronic markets on the Internet
D) innovative marketing methods
Diff: 1 Page Ref: 6
27) One of the major objectives of ________ is to facilitate closing the gap between the current performance of an organization and its desired performance, as expressed in its mission, objectives, and goals.
A) business alliances
B) customer relationships
C) business models
D) computerized decision support
Diff: 3 Page Ref: 6
28) Management is a process by which organizational goals are achieved by using resources. The resources are considered ________, and attainment of goals is viewed as the ________ of the process.
A) expenses; profits
B) inputs; output
C) pressures; opportunities
D) scarce; success
Diff: 2 Page Ref: 7
29) Mintzberg's (1980) classic study of top managers suggests that managers perform ten major roles that can be classified into three major categories. Each of the following is one of those major categories except:
A) relational
B) interpersonal
C) decisional
D) informational
Diff: 2 Page Ref: 7
30) For years in the past, managers considered decision making a(n) ________, that is, a talent acquired over a long period through experience and by using intuition.
A) science
B) strategy
C) art
D) methodology
Diff: 2 Page Ref: 7
31) According to Mintzberg's ten managerial roles, a ________ is responsible for the motivation and activation of subordinates.
A) leader
B) figurehead
C) liason
D) spokesperson
Diff: 2 Page Ref: 7
32) According to Mintzberg's ten managerial roles, a ________ is symbolic head; or someone who is obliged to perform a number of routine duties.
A) leader
B) figurehead
C) liason
D) spokesperson
Diff: 2 Page Ref: 7
33) Today's computerized systems possess capabilities that can facilitate decision support in a number of ways, including each of the following except:
A) Increased productivity of group members
B) Improved communication and collaboration
C) Agility support
D) Reduced environmental pressures
Diff: 2 Page Ref: 9
34) Decision-making processes fall along a continuum that ranges from ________ to ________.
A) highly structured; highly unstructured
B) semistructured; unstructured
C) managerial; strategic
D) ad hoc; nonprogrammed
Diff: 2 Page Ref: 11
35) Phases in the decision-making process include each of the following except:
A) intelligence
B) analysis
C) design
D) choice
Diff: 2 Page Ref: 12
36) Solving semistructured problems may involve a combination of both standard solution procedures and human judgment. Management science can provide models for the portion of the decision-making problem that is ________.
A) controlled
B) semistructured
C) unstructured
D) structured
Diff: 2 Page Ref: 13
37) A(n) ________ is a rule-based system that provides a solution, usually in one functional area, such as finance or manufacturing, to a specific repetitive managerial problem.
A) decision support systems (DSS)
B) transaction processing system (TPS)
C) online analytical processing (OLAP) system
D) automated decision system (ADS)
Diff: 2 Page Ref: 14
38) Which of the following is one of the two major types of Decision Support Systems?
A) Number-oriented
B) Text-oriented
C) Model-oriented
D) Application-oriented
Diff: 2 Page Ref: 17
39) Which of the following is not a component of DSS architecture?
A) Data
B) Model
C) Knowledge
D) Web
Diff: 2 Page Ref: 17
40) The major benefit of ________ to the company is the ability to provide accurate information when needed.
A) data warehouse
B) analytical models
C) management information systems
D) business intelligence
41) Management is a process by which organizational goals are achieved using ________.
42) Making a decision means selecting the best alternative from two or more ________ solutions.
43) The level of organization's ________, or the success of management, depends on the performance of managerial functions, such as planning, organizing, directing, and controlling.
44) ________ indicates that an individual's problem-solving capability is limited when a wide range of diverse information and knowledge is required.
45) ________ defines long-range goals and policies for resource allocation.
46) ________ is the efficient and effective execution of specific tasks.
47) Gorry and Scott-Morton suggested, for example, that for semistructured decisions and unstructured decisions, conventional ________ and management science (MS) tools are insufficient.
48) ________ involves transforming the real-world problem into an appropriate prototype structure.
49) Structured problems, which are encountered repeatedly, have a high level of ________.
50) ________ is the application of scientific approach and mathematical models to the analysis and solution of managerial decision situations.
51) Automated Decision Systems (ADS) is a business ________ system that uses intelligence to recommend solution to repetitive decisions (such as pricing).
52) Decision support systems are computer-based support systems for management decision makers who deal with ________ problems.
53) ________ is the first component of the DSS architecture.
54) The process of business intelligence is based on the ________ of data to information, then to decisions, and finally to actions.
55) Business intelligence's major objective is to enable ________ access to data, enable manipulation of these data, and to provide business managers and analysts the ability to conduct appropriate analysis.
56) ________ is a process of searching for unknown relationships or information in large databases or data warehouses, using intelligent tools such as neural computing, predictive analytics techniques, or advanced statistical methods.
57) ________ which is also referred to as corporate performance management (CPM), is an emerging portfolio of applications and methodology that contains evolving BI architecture and tools in its core.
58) ________ are a type of user interface that provides a comprehensive visual view of corporate performance measures, trends, and exceptions.
59) A ________ is a system in which human participants and/or machines perform a business process, using information, technology, and other resources, to produce products and/or services for internal or external customers.
60) List four major business environmental factors in today's business environment.
61) List and define the three interpersonal roles of a manager as described by Mintzberg.
62) List and define the three informational roles of a manager as described by Mintzberg.
63) List and define the four decisional roles of a manager as described by Mintzberg.
64) Describe the four phases in the decision-making process.
65) Distinguish between structured and unstructured problems.
66) Describe the three categories that comprise Anthony's taxonomy of management.
67) List the steps involved in the management science (MS) approach to problem solving.
68) List the components of the architecture of business intelligence.
69) Describe the nine elements of a work system.
Chapter 2 Decision Making, Systems, Modeling, and Support
1) When trying to solve a problem, developers at the manufacturer HP consider the three phases in developing a
model. Their first phase is problem analytics.
Diff: 2 Page Ref: 39
2) If a problem arises due to misalignment of incentives or unclear lines of authority or plans, then no model can help solve that root problem.
Diff: 2 Page Ref: 39
3) When developers design and develop tools, the first guideline is to develop a prototype to test the designs and get early feedback from the end users to see what works for them and what needs to be changed.
Diff: 2 Page Ref: 39
4) It is important to remove unneeded complexity from a model before handoff because as a tool becomes more complex it requires more automation.
Diff: 3 Page Ref: 39
5) Groupthink among decision makers can help lead to the best decisions.
Diff: 3 Page Ref: 41
6) Experimentation with a real system is possible only for one set of conditions at a time and can be disastrous.
Diff: 2 Page Ref: 41
7) Collecting information and analyzing a problem are the fastest and least expensive parts of decision-making.
Diff: 2 Page Ref: 41
8) Fast decision-making requirements tend to reduce decision quality.
Diff: 1 Page Ref: 41
9) According to Simon, managerial decision making is synonymous with managers using decision support systems.
Diff: 1 Page Ref: 42
10) Most Web-based DSS are focused on improving decision efficiency.
Diff: 1 Page Ref: 42
11) Personality temperament tests are often used to determine decision styles.
Diff: 2 Page Ref: 43
12) Problem identification is the conceptualization of a problem in an attempt to place it in a definable category, possibly leading to a standard solution approach.
Diff: 3 Page Ref: 48
13) One approach to solving a complex problem is to divide it into simpler subproblems and then solve those subproblems.
Diff: 2 Page Ref: 49
14) A problem exists in an organization only if someone or some group takes on the responsibility of attacking it and if the organization has the ability to solve it.
Diff: 2 Page Ref: 50
15) The process of modeling involves determining the (usually mathematical, sometimes symbolic) relationships among the variables.
Diff: 1 Page Ref: 51
16) "Humans are economic beings whose objective is to maximize the attainment of goals" is one of the assumptions of rational decision makers.
Diff: 2 Page Ref: 52
17) The idea of "thinking with your gut" is a heuristic approach to decision making.
Diff: 1 Page Ref: 52
18) Rationality is bounded only by limitations on human processing capacities but not by individual differences.
Diff: 2 Page Ref: 55
19) In general, people have a tendency to measure uncertainty and risk badly; for example, people tend to be overconfident and have an illusion of control in decision making.
Diff: 2 Page Ref: 56
20) Web-based systems have clearly influenced how decision making is supported.
Diff: 2 Page Ref: 63
21) Groupthink tends to ________ the quality of decisions.
A) be detrimental to
B) improve
C) prolong
D) complicate
Diff: 2 Page Ref: 41
22) Decision making that involves too much information may lead to a condition known as _______.
A) groupthink
B) information overload
C) experimentation
D) over assumption
Diff: 1 Page Ref: 41
23) Decisions are often made by ________, especially at lower managerial levels and in small organizations.
A) groups
B) management teams
C) individuals
D) computerized systems
Diff: 2 Page Ref: 42
24) Different decision styles require different types of support. A major factor that determines the type of required support is whether the decision maker is ________.
A) autocratic
B) consultative
C) an individual or a group
D) democratic
Diff: 2 Page Ref: 43
25) Which of the following is a physical replica of a system, usually on a different scale from the original?
A) Complex model
B) Iconic model
C) Duplicated model
D) Composite model
Diff: 2 Page Ref: 44
26) Which of the following model behaves like the real system but does not look like it?
A) Composite model
B) Analog model
C) Dense model
D) Iconic model
Diff: 2 Page Ref: 44
27) There is a continuous flow of activity from one phase to the next phase in a decision making process, but at any phase there may be a return to a previous phase. ________ is an essential part of this process.
A) Testing
B) Trial-and-error
C) Experimenting
D) Modeling
Diff: 2 Page Ref: 46
28) The identification of organizational goals and objectives related to an issue of concern and determination of whether they are being met is the beginning of the ________ of decision making.
A) initial phase
B) intelligence phase
C) brainstorming phase
D) generation phase
Diff: 2 Page Ref: 46
29) Which of the following involves finding or developing and analyzing possible courses of action in a decision making phase?
A) Consultation phase
B) Communication phase
C) Intelligence phase
D) Design phase
Diff: 2 Page Ref: 46
30) A(n) ________ is a criterion that describes the acceptability of a solution approach. In a model, it is a result variable.
A) principle of choice
B) optimization variable
C) trade-off
D) worst-case criterion
Diff: 3 Page Ref: 51
31) Which of the following describes normative models?
A) These models are based on anomalies in rational decision making.
B) They are models in which the chosen alternative is demonstrably the best of all possible alternatives.
C) They are models based on the phenomenon of preference reversal.
D) They lead to an approach known as suboptimization.
Diff: 3 Page Ref: 51
32) Which of the following, by definition, requires a decision maker to consider the impact of each alternative course of action on the entire organization because a decision made in one area may have significant effects in other areas?
A) Satisfaction
B) Worst-case
C) Feasibility
D) Optimization
Diff: 1 Page Ref: 51
33) "Thinking with your gut" is a heuristic approach to decision making that would work best for ________.
A) amateur chefs
B) payroll processors and accountants
C) experienced firefighters and military personnel on the battlefield
D) structured decision situations
Diff: 3 Page Ref: 52
34) With ________, the performance of the system is checked for a given set of alternatives, rather than for all alternatives. Therefore, there is no guarantee that an alternative selected is optimal.
A) analytical analysis
B) descriptive analysis
C) optimization analysis
D) quantitative analysis
Diff: 3 Page Ref: 54
35) The usual reasons for ________ are time pressures and recognition that the marginal benefit of a better solution is not worth the marginal cost to obtain it
A) satisficing
B) settling
C) compromising
D) rationalizing
Diff: 3 Page Ref: 55
36) A ________ describes the decision and uncontrollable variables and parameters for a specific modeling situation.
A) statement
B) model
C) program
D) scenario
Diff: 2 Page Ref: 57
37) Which of the following is a study of the effect of a change in one or more input variables on a proposed solution?
A) Sensitivity analysis
B) Boundary analysis
C) Fish bone analysis
D) Input-output analysis
Diff: 2 Page Ref: 58
38) A ________ can help a decision maker sketch out the important qualitative factors and their causal relationships in a messy decision-making situation.
A) mathematical map
B) cognitive map
C) qualitative map
D) narrative map
Diff: 2 Page Ref: 62
39) The ________ of a proposed solution to a problem is the initiation of a new order of things or the introduction of change.
A) method
B) implementation
C) approach
D) style
Diff: 2 Page Ref: 62
40) The Museum of Natural History in Aarhus, Denmark uses ________ to collect detailed information about visitors' use of the exhibits to help determine visitors' behavior to identify high-demand exhibits.
A) group decision systems
B) algorithms
C) RFID
D) expert systems
Diff: 2 Page Ref: 71
41) ________ is synonymous with the whole process of management.
42) A ________ is a simplified representation or abstraction of reality.
43) ________ are the descriptive representations of decision-making situations that we form in our heads and think about.
44) The ________ phase in decision making involves scanning the environment and collecting information.
45) Problem ________ is the conceptualization of a problem in an attempt to place it in a definable category, possibly leading to a standard solution approach.
46) The process of modeling is a combination of art and science. As an art, a level of creativity and finesse is required when determining what simplifying ________ are appropriate and helpful.
47) A ________ describes the alternatives a manager must choose among, e.g., like how many cars to deliver to a specific rental agency or how to advertise at specific times.
48) A ________ is a model that prescribes how a system should operate.
49) ________ may also involve simply bounding the search for an optimum by considering fewer criteria or alternatives or by eliminating large portions of the problem from evaluation.
50) A ________ is extremely useful in DSS for investigating the consequences of various alternative courses of action under different configurations of inputs and processes.
51) ________ is the imitation of reality and has been applied to many areas of decision making.
52) Another descriptive decision-making model is the use of ________ to describe a decision-making situation. It is extremely effective when a group is making a decision and can lead to a more common frame.
53) ________ is a willingness to settle for a satisfactory solution that is, in effect, suboptimizing.
54) Aside from estimating the potential utility or value of a particular decision's outcome, the best decision makers are capable of accurately estimating the ________ associated with the resultant outcomes resulting from making each decision.
55) A ________ asks a computer what the effect of changing some of the input data or parameters would be.
56) The model is the critical component in the decision-making process, but one may make a number of errors in its development and use. ________ the model before it is used is critical.
57) A(n) ________ is a step-by-step search in which improvement is made at every step until the best solution is found.
58) ________ is the critical act of decision making when the actual decision and commitment to follow a certain course of action are made.
59) A data warehouse can support the intelligence phase by continuously monitoring both internal and
external information, looking for early signs of problems and opportunities through a Web-based enterprise information portal called a(n) ________.
60) Much of the information used in seeking new opportunities is ________, or soft.
61) Discuss the importance of decision style.
62) Describe the three classifications of models.
63) List five benefits of using models.
64) Briefly describe Simon's four phases of decision making.
65) Briefly describe the four steps in the intelligence phase of decision making.
66) Briefly describe problem decomposition and its benefits.
67) Describe the three assumptions of rational decision makers used in Normative decision theory.
68) Compare the normative and descriptive approaches to decision making.
69) Discuss why scenarios play an important role in management support systems.
70) Describe 3 findings about decision making in the Digital Age.
Chapter 3 Decision Support Systems Concepts, Methodologies, and Technologies: An Overview
1) Decision makers at the Avantas Company selected Planners Lab for data analysis because Planners Lab offered an easy-to-use alternative to Excel to create "what-if" scenarios.
Diff: 3 Page Ref: 71
2) A key component of DSS is the ability to visualize the results. For example, it is important for executives to visualize the results of modifying assumptions.
Diff: 2 Page Ref: 74
3) Business intelligence (BI) is typically built to support the solution of a certain problem or to evaluate an opportunity.
Diff: 2 Page Ref: 78
4) All DSSs have common components that enable them to provide the same capabilities and support to users.
Diff: 1 Page Ref: 77
5) Business analytics (BA) implies the use of models and data to improve an organization's performance or competitive posture
Diff: 2 Page Ref: 78
6) Knowledge Management Systems (KMS) that are developed around communities that practice collaborative work are a type of document-driven DSS.
Diff: 2 Page Ref: 80
7) The most common end-user tool for DSS development is Microsoft Access, which includes statistical packages, a linear programming package, and financial and management science models.
Diff: 2 Page Ref: 80
8) A DSS can be custom-made by assembling the system from a variety of tools including databases, Web servers and clients, and analytical engines, often from several vendors.
Diff: 1 Page Ref: 84
9) A DSS database can include multimedia objects, e.g., pictures, maps, and sounds.
Diff: 1 Page Ref: 91
10) XML (eXtensible Markup Language) is becoming more important in DSS due to the growth of mobile commerce applications, on handheld devices, e.g., PDAs and cell phones.
Diff: 3 Page Ref: 91
11) To create or load a DSS database or a data warehouse, it is often necessary to capture data from several sources, which is a simple (trivial) process.
Diff: 3 Page Ref: 92
12) An effective database and its management can support many managerial activities; however, the real power of a DSS occurs when data are integrated with its models.
Diff: 2 Page Ref: 92
13) A key issue in data management is that of data quality. Poor quality data, which leads to poor quality information leads directly to waste.
Diff: 1 Page Ref: 93
14) Data integration issues generally become critical when implementing an enterprise information system like a supply management system.
Diff: 1 Page Ref: 94
15) Planned models are used mainly by middle management to assist in allocating and controlling the organization's resources.
Diff: 3 Page Ref: 97
16) 3Because DSS deal with semistructured or unstructured problems, it is often necessary to customize models, using programming tools and languages.
Diff: 1 Page Ref: 98
17) Database directory is a catalog of all the models and other software in the model base.
Diff: 2 Page Ref: 99
18) User interface of a DSS includes not only the hardware and software but also factors that deal with ease of use, accessibility, and human-machine interactions.
Diff: 2 Page Ref: 100
19) A difficult user interface is one of the major reasons why managers do not use computers and quantitative analyses as much as they could, given the availability of these technologies.
Diff: 1 Page Ref: 100
20) If the main user of a DSS is replaced by another, less knowledgeable user (in terms of the decision-making problem and environment), the DSS will generally be less effective.
Diff: 1 Page Ref: 107
21) A DSS is an approach for supporting decision making. It uses an interactive, flexible, adaptable computer-based information system (CBIS) developed to support the solution to a specific, ________ management problem.
A) easy
B) problematic
C) nonstructured
D) hard
Diff: 2 Page Ref: 75
22) ________ implies the use of models and data to improve an organization's performance or competitive posture.
A) Business applications
B) Business analytics
C) Business intelligence
D) Business rules
Diff: 2 Page Ref: 78
23) ________ systems have models embedded in them, but they are still not well understood in practice.
A) Web analytics
B) Data mining and OLAP
C) XML
D) Data dictionary
Diff: 3 Page Ref: 78
24) By definition, a DSS must include ________.
A) business intelligence
B) an expert system
C) an animation system
D) a user interface
Diff: 2 Page Ref: 86
25) Which of the following subsystem can support any of the other subsystems or act as an independent component? It also provides intelligence to augment the decision maker's own?
A) Knowledge-base management subsystem
B) Intelligence-base subsystem
C) User interface subsystem
D) Expertise-base subsystem
Diff: 2 Page Ref: 86
26) A(n) ________ is a collection of interrelated data, organized to meet the needs and structure of an organization that can be used by more than one person for more than one application.
A) business intelligence
B) expert system
C) database
D) data repository
Diff: 1 Page Ref: 90
27) The operation of capturing data from several sources and loading it to a data warehouse is called:
A) extraction.
B) loading.
C) mining.
D) storing.
Diff: 1 Page Ref: 92
28) A database is created, accessed, and updated by a(n) ________.
A) expert system
B) animation system
C) knowledge system
D) database management system
Diff: 2 Page Ref: 92
29) Data directory is a catalog of all the data in the database. It contains ________, and its main function is to answer questions about the availability of data items, their source, and their exact meaning.
A) data foundations
B) data definitions
C) data names
D) data sources
Diff: 2 Page Ref: 93
30) The ________ is especially appropriate for supporting the intelligence phase of the decision-making process by helping to scan data and identify problem areas or opportunities.
A) intelligence facility
B) query facility
C) data directory
D) knowledge facility
Diff: 1 Page Ref: 93
31) A(n) ________ contains routine and special statistical, financial, forecasting, management science, and other quantitative models that provide the analysis capabilities in a DSS.
A) model base
B) application base
C) analytical base
D) query base
Diff: 3 Page Ref: 96
32) Which of the following is used mainly by middle management to assist in allocating and controlling the organization's resources?
A) Tactical model
B) Planned model
C) Managerial model
D) Middle-management model
Diff: 2 Page Ref: 97
33) When voice input with accompanying ________ software is used, verbal instructions with accompanied actions and outputs can be invoked.
A) language recognition
B) accent recognition
C) voice recognition
D) speech recognition
Diff: 2 Page Ref: 102
34) Most data mining applications include intelligent systems, such as artificial neural networks (ANN) and rule induction methods for expert systems (ES), to search for potentially profitable ________ in data.
A) samples
B) patterns
C) sections
D) trends
Diff: 2 Page Ref: 106
35) ________ control and coordinate the use of software to support group work.
A) Expert tool users
B) Facilitators
C) Analyst
D) Managers
Diff: 2 Page Ref: 107
36) The choice of hardware can be made ________ the design of the MSS software, but it is often determined by what is already available in the organization.
A) before
B) during
C) after
D) all of the above
Diff: 2 Page Ref: 107
37) The de facto DSS hardware standard is a(n) ________ through which the DBMS provides data.
A) Web server
B) data center
C) mainframe
D) local area network
Diff: 3 Page Ref: 108
38) Optimization, simulation, statistics systems, and ES currently run in ________. These developments simplify access to data, models, and knowledge, and simplify their integration.
A) ASPs
B) user interfaces
C) Java
D) .NET
Diff: 3 Page Ref: 108
39) ________ is a robust DSS modeling language.
A) Ruby on Rails
B) Planners Lab
C) Sybase
D) OLAP
Diff: 2 Page Ref: 108
40) All of the following are characteristics of Planners Lab except:
A) Planners Lab makes it possible for the decision makers to play with assumptions to reflect alternative views of the future.
B) It lets decision makers describe their plans in their own words and with their own assumptions.
C) It facilitates a conversation with the decision maker in the process of describing business assumptions.
D) All assumptions are described in English equations only.
Diff: 2 Page Ref: 110
41) ________ describes the business analytics method of forecasting problems and opportunities rather than simply reporting them as they occur.
42) ________ are generally utilized to analyze decision-making situations and make a DSS different from most MIS.
43) A database-oriented DSS features strong ________ capabilities.
44) ________ deal with specific problems that are usually neither anticipated nor recurring.
45) ________ is the physical data repository organized to provide enterprise wide, cleaned data in a standardized format.
46) A(n) ________ subsystem includes a database that contains relevant data for the situation and is managed by software called the database management system.
47) Users of DSS communicate with and command the DSS through the ________ subsystem.
48) In building and using DSS, it is often necessary to access, manipulate, and query data. The ________ performs these tasks.
Answer: query facility
Diff: 2 Page Ref: 93
49) Selection and ________ are two important functions of a DSS query system.
50) As the size of the data to be stored and accessed increases, processing times and storage space also grow, sometimes dramatically. Large databases present major ________ problems.
51) One key issue that DBMS must handle is data security. Data can be ________ so that even in the case of unauthorized access, the viewed data is scrambled and unintelligible.
52) ________ models are used to support the day-to-day working activities of the organization. Typical decisions involve e-commerce transaction acceptance, approval of personal loans by a bank, production scheduling, inventory control, maintenance planning and scheduling, and quality control.
53) ________ are Web-based business analytics tools to assist in decision making.
54) Operational models mainly support first-line managers' decision making with a daily to ________ time horizon.
55) The models in the model base can also be classified by functional areas or by ________.
56) ________ are preprogrammed software elements that can be used to build computerized models. One example is the random-number generator that can be employed in the construction of a simulation model.
57) Advanced DSS are equipped with a component called a(n) ________ subsystem. This component can supply the required expertise for solving some aspects of the problem and provide knowledge that can enhance the operation of other DSS components.
58) An ________ allows the manager to benefit from the decision support system without actually having to use the keyboard.
59) Distributed DSS runs on various types of networks, including the Internet, intranets, and extranets. Access may be provided for mobile devices, e.g., notebook PCs and mobile telephones. This ________ has become critical for deploying decision-making capability in the field, especially for salespersons and technicians.
60) Planners Lab is a DSS ________ language.
61) Identify the key characteristics and capabilities of a DSS.
62) List the capabilities of institutional DSS and ad hoc DSS.
63) List the five major components of a DSS.
64) List and describe the four components of the data management subsystem.
65) Describe five of Larry English's Top Ten essential ingredients of data quality management.
66) List the five elements of the model management subsystem.
67) Explain the differences in strategic, tactical, operational, and analytical models.
68) List the four main functions of MBMS (model base management system) software
69) Explain the role, components, and importance of the user interface (dialog) subsystem.
70) Discuss the advantages of developing a models for a DSS with Planners Lab instead of traditional programming languages or spreadsheets?
Chapter 4 Modeling and Analysis
1) The use of an optimization model in the auction bidding process to award school meal contracts in Chile has significantly decreased costs.
Diff: 1 Page Ref: 138
2) In developing countries, small changes in state-run social programs using management science support can lead to enormous savings.
Diff: 2 Page Ref: 138
3) All companies, except for those under financial stress, should invest in simulation models to increase their efficiency.
Diff: 2 Page Ref: 139
4) A DSS can be composed of several models, some standard and some custom built, used collectively to support strategic decisions in the company.
Diff: 1 Page Ref: 139
5) Modeling involves data analysis with trend lines and establishing relationships with statistical methods.
Diff: 1 Page Ref: 141
6) Predictive analytics is essential for construction and manipulation of models because when a decision is implemented, the results usually occur in the future.
Diff: 2 Page Ref: 142
7) Models, like data, must be managed to maintain their applicability, and thus their integrity.
Diff: 3 Page Ref: 143
8) DSS uses mostly qualitative models, whereas expert systems use quantitative models in their applications.
Diff: 2 Page Ref: 143
9) To use models and solution techniques effectively, one needs to have gained experience through developing and solving simple ones.
Diff: 2 Page Ref: 144
10) One recent trend in modeling involves the development of model libraries and solution technique libraries.
Diff: 1 Page Ref: 144
11) There is a trend toward developing and using Web tools and software to access and run software to perform modeling, optimization, and simulation, even though this has complicated the application of many models to real-world problems.
Diff: 3 Page Ref: 144
12) An influence diagram is a graphical representation of a model; that is, it is a model of a model.
Diff: 2 Page Ref: 145
13) In decision making under uncertainty, the decision maker considers situations in which several outcomes are possible for each course of action. In this case, the decision maker can estimate the probability of occurrence of the possible outcomes.
Diff: 2 Page Ref: 148
14) One of the assumptions of the linear programming allocation model is that not all data are known with certainty.
Diff: 2 Page Ref: 154
15) The pessimistic approach assumes that the best possible outcome of each alternative will occur and then selects the best of the best.
Diff: 1 Page Ref: 163
16) Today's management systems are designed to help managers attain simultaneous, but at times, conflicting goals.
Diff: 2 Page Ref: 165
17) The AHP manipulates quantitative and qualitative decision-making criteria in a fairly structured manner, allowing a decision maker to make trade-offs quickly and expertly.
Diff: 3 Page Ref: 165
18) Heuristics techniques are used mainly for solving structured problems, usually of a tactical or operational nature, in areas such as resource allocation or inventory management.
Diff: 2 Page Ref: 170
19) Blind search techniques are arbitrary search approaches that are not guided.
Diff: 1 Page Ref: 170
20) Continuous distributions are situations with unlimited numbers of possible events that follow density functions, such as the normal distribution.
Diff: 2 Page Ref: 174
21) Which of the following is a key element in most DSS and a necessity in a model-based DSS?
A) Database
B) Analytical model
C) Modeling
D) Business intelligence
Diff: 1 Page Ref: 139
22) ________ diagrams are graphical models of mathematical models, which can facilitate the process of identifying the model's variables.
A) Decision
B) Tree
C) Fish bone
D) Influence
Diff: 2 Page Ref: 141
23) E-commerce has created an immense need for ________ and an abundance of available information for performing it.
A) nonlinear programming
B) forecasting
C) auction models
D) queuing
Diff: 2 Page Ref: 142
24) Which of the following models takes a single snapshot of a situation where everything occurs in a singleinterval?
A) Sliced model
B) Snapshot model
C) Stationary model
D) Static model
Diff: 2 Page Ref: 143
25) Which of the following techniques is used to solve optimization problems that have few alternatives?
A) Trial-and-error
B) Binary search
C) Expert systems
D) Decision trees
Diff: 3 Page Ref: 144
26) ________ is a type of model that is used to find a good enough solution, or the best solution among alternatives, using experimentation.
A) Simulation
B) Heuristics
C) Predictive
D) Deterministic
Diff: 2 Page Ref: 144
27) Which of the following are factors that affect the result variables, but are not under the control of the decision maker?
A) Parameters
B) Decision variables
C) Independent variables
D) Output variables
Diff: 1 Page Ref: 146
28) The four components in a decision support mathematical model are linked together by the ________ relationships, such as equations.
A) mathematical
B) cause-and-effect
C) analytical
D) data integration
Diff: 2 Page Ref: 147
29) Decision situations are often classified on the basis of what the decision maker knows about the forecasted results. Which of the following is one of the categories?
A) Indecision
B) Firmness
C) Ambiguity
D) Certainty
Diff: 1 Page Ref: 148
30) Which of the following is not a characteristic of a linear programming model?
A) A limited quantity of economic resources is available for allocation.
B) The resources are used in the production of products or services.
C) The maximum number of constraints is four.
D) There are two or more ways in which the resources can be used.
Diff: 3 Page Ref: 154
31) A model builder makes predictions and assumptions regarding the input data, many of which deal with the assessment of uncertain futures. Which of the following attempts to assess the impact of a change in the input data or parameters on the proposed solution?
A) Mathematical relationships
B) Decision analysis
C) Goal programming
D) Sensitivity analysis
Diff: 3 Page Ref: 158
32) Which of the following calculates the values of the inputs necessary to achieve a desired level of an output?
A) Goal seeking analysis
B) Decision analysis
C) Trial-and-error
D) Sensitivity analysis
Diff: 2 Page Ref: 161
33) Decision situations that involve a finite and usually not-too-large number of alternatives are modeled by an approach called ________.
A) exhaustive search
B) decision map
C) decision analysis
D) trial-and-error
Diff: 2 Page Ref: 162
34) Which of the following is a step-by-step search process for obtaining an optimal solution?
A) Analytic technique
B) Algorithm
C) Heuristic
D) Linear programming
Diff: 2 Page Ref: 169
35) Which of the following are the informal, judgmental knowledge of an application area that constitute the "rules of good judgment" in the field?
A) Binary search
B) Algorithm
C) Heuristic
D) Rule of thumb
Diff: 2 Page Ref: 170
36) Typically there is some randomness in decision-making situations. Because DSS deals with semistructured or unstructured situations, reality is complex, which may not be easily represented by optimization or other models but can often be handled by ________.
A) simulation
B) linear programming
C) statistical analysis
D) forecasting
Diff: 2 Page Ref: 171
37) Which of the following is one of the disadvantages of simulation?
A) The model is built from the manager's perspective.
B) Simulation automatically produces many important performance measures.
C) Simulation is often the only DSS modeling method that can readily handle relatively unstructured problems.
D) An optimal solution cannot be guaranteed, but relatively good ones are generally found.
Diff: 3 Page Ref: 173
38) Monte Carlo simulation is a type of ________ simulation.
A) deterministic
B) probabilistic
C) exact
D) analytical
Diff: 2 Page Ref: 174
39) ________ uses animated computer graphic displays to present the impact of different managerial decisions. It differs from regular graphics in that the user can adjust the decision making process and see the results of the intervention.
A) Visual interactive simulation
B) Quantitative software
C) OLAP
D) Object-oriented model base
Diff: 2 Page Ref: 178
40) Which of the following packages are preprogrammed (sometimes called ready-made) models and optimization systems that sometimes serve as building blocks for other quantitative models?
A) Quantitative software
B) Qualitative software
C) Development tool
D) Application
Diff: 2 Page Ref: 179
41) ________ conducts a search for and an analysis of information in external databases and flows of information.
42) Customer relationship management systems and revenue management systems rely heavily on forecasting techniques, which are typically described as ________.
43) ________ models are time dependent; and are valuable because they represent trends and patterns over time.
44) ________ is a variable that expresses the result of a decision (e.g., one concerning profit), usually one of the goals of a decision-making problem.
45) ________ are variables that contain the values of intermediate outcomes in mathematical models.
46) In decision making under ________, the decision maker considers situations in which several outcomes are possible for each course of action. The decision maker does not know, or cannot estimate, the probability of occurrence of the possible outcomes.
47) ________ is a decision-making method that analyzes the risk associated with different alternatives.
48) ________ is a family of tools designed to help solve managerial problems in which the decision maker must allocate scarce resources among competing activities to optimize a measurable goal.
49) The allocation of resources in a linear programming problem is usually restricted by limitations and requirements called ________.
50) ________ investigates what the effect of changing some of the input data or parameters would be.
51) ________ analysis calculates the values of the inputs necessary to achieve a desired level of an output.
52) ________ conveniently organize information and knowledge in a systematic, tabular manner to prepare it for analysis.
53) A(n) ________ is a step-by-step search process for obtaining an optimal solution
54) ________ is a measure of how difficult a problem is in terms of its formulation for optimization, its required optimization effort, or its stochastic nature.
55) ________ distributions involve a situation with a limited number of events or variables that can take on only a finite number of values.
56) ________ distributions are situations with unlimited numbers of possible events that follow density functions, such as the normal distribution.
57) If the simulation results do not match the intuition or judgment of the decision maker, a ________ gap in the results can occur.
58) ________ is a simulation approach used in the decision-making process that shows graphical animation in which systems and processes are presented dynamically to the decision maker. It enables visualization of the results of different potential actions.
59) A(n) ________ is a model based management system constructed in an object-oriented environment.
60) ________ is the relational approach to the design and development of a model base management system.
61) Distinguish between a static model and a dynamic model.
62) Briefly describe three of the seven categories of models.
63) What is an influence diagram? Name a benefit of influence diagrams.
64) Distinguish between decision making under certainty, risk, and uncertainty.
65) List the characteristics of a linear program allocation problem.
66) List and briefly discuss the three major components of linear programming.
67) List five most common optimization models.
68) List the type of relationships sensitivity analysis study can test.
69) List the steps involved in the simulation process.
70) Explain the value of visual interactive simulation (VIS).
Chapter 5 Data Mining for Business Intelligence
1) Data mining is a way for companies to develop business intelligence from their data to gain a better understanding of their customers and operations and to solve complex organizational problems.
2) Data mining is a prime candidate for better management of companies that are data-rich, but knowledge-poor.
3) Business analytics cannot be conducted in real time because it includes components such as metrics and reengineering tools.
Diff: 1 Page Ref: 195
4) Technically speaking, data mining is a process that uses statistical, mathematical, and artificial intelligence techniques to extract and identify useful information and subsequent knowledge from large sets of data.
Diff: 2 Page Ref: 196
5) The data mining environment is usually a client-server architecture or a Web-based information systems architecture.
Diff: 2 Page Ref: 196
6) Data mining offers organizations a decision-enhancing environment to exploit opportunities by transforming data into a strategic weapon.
Diff: 1 Page Ref: 197
7) At the highest level of abstraction, all data can be divided into interval data and ratio data.
Diff: 2 Page Ref: 197
8) Two types of categorical data are nominal data and ordinal data.
Diff: 2 Page Ref: 197
9) The variable marital status can be categorized using the codes (1) single, (2) married, and (3) divorced. These codes are examples of ordinal data.
Diff: 2 Page Ref: 198
10) A common example of interval scale measurement is temperature on the Celsius scale.
Diff: 2 Page Ref: 198
11) Mass, length, time, plane angle, energy, and electric charge are examples of physical measures whose data are represented in interval scales.
Diff: 2 Page Ref: 198
12) Data types such as date/time, unstructured text, image, and audio need to be converted into some form of categorical or numeric representation before they can be processed by data mining algorithms.
Diff: 2 Page Ref: 198
13) Associations are a type of pattern that discovers time-ordered events, such as predicting that an existing banking customer who already has a checking account will open a savings account followed by an investment account within a year.
Diff: 2 Page Ref: 200
14) Predictions tells the nature of future occurrences of certain events based on what has happened in the past, such as predicting the winner of the Super Bowl or forecasting the absolute temperature of a particular day.
Diff: 1 Page Ref: 200
15) Clustering partitions a collection of things, such as objects and events presented in a structured dataset into segments whose members share similar characteristics.
Diff: 2 Page Ref: 202
16) Cross-Industry Standard Process for Data Mining, or CRISP-DM, is one of the most popular
nonproprietary standard methodologies for data mining.
Diff: 2 Page Ref: 207
17) The first step in the data mining process is to understand the relevant data from the available databases.
Diff: 2 Page Ref: 208
18) Compared to the other steps in CRISP-DM, data preprocessing consumes the most time and effort; most believe that this step accounts for roughly 80 percent of the total time spent on a data mining project
Diff: 2 Page Ref: 209
19) In order to be applied successfully, a data mining study must be viewed as a set of automated software tools and techniques.
Diff: 2 Page Ref: 214
20) Data mining requires a separate, dedicated database.
Diff: 1 Page Ref: 233
21) In an article in Harvard Business Review, Thomas Davenport (2006) argued that the latest strategic weapon for companies is ________.
A) customer relationship management
B) e-commerce
C) online auctions
D) analytical decision making
Diff: 2 Page Ref: 194
22) The term data mining was originally used to ________.
A) include most forms of data analysis in order to increase sales
B) describe the analysis of huge datasets stored in data warehouses
C) describe the process through which previously unknown patterns in data were discovered
D) All of the above
Diff: 2 Page Ref: 194
23) Why has data mining gained the attention of the business world?
A) More intense competition at the global scale driven by customers' ever-changing needs and wants in an increasingly saturated marketplace.
B) Consolidation and integration of database records, which enables a single view of customers and vendors.
C) Significant reduction in the cost of hardware and software for data storage and processing.
D) All of the above
Diff: 2 Page Ref: 194
24) On the commercial side, the most common use of data mining has been in ________ sectors.
A) manufacturing and heath care
B) finance, retail, and health care
C) online retail and government
D) R&D and scientific
Diff: 3 Page Ref: 194
25) Business analytics and data mining provided 1-800-Flowers with all of the following benefits except:
A) More efficient marketing campaigns.
B) Increased mailings and response rates.
C) Better customer experience and retention.
D) Increased repeat sales.
Diff: 2 Page Ref: 195
26) Data mining is tightly positioned at the intersection of many disciplines. Those disciplines include all of the following except:
A) management science
B) statistics
C) information systems and databases
D) logistics
Diff: 2 Page Ref: 196
27) What is a major characteristic of data mining?
A) Data mining tools are readily combined with spreadsheets and other software development
tools.
B) Because of the large amounts of data and massive search efforts, it is sometimes necessary to use serial processing for data mining.
C) Data are often buried within numerous small large databases, which sometimes contain data from several years.
D) The miner needs sophisticated programming skill.
Diff: 3 Page Ref: 196
28) A query that can be run by an end users and is not programmed in advance is considered a(n) ________ query.
A) tailored
B) casual
C) informal
D) ad hoc
Diff: 1 Page Ref: 196
29) At the highest level of abstraction, data can be classified as ________ and ________.
A) alpha; numeric
B) categorical; numerical
C) nominal; ratio
D) interval; ration
Diff: 2 Page Ref: 197
30) Data that has a meaningful, or nonarbitrary, zero point is ________ data.
A) categorical
B) nominal
C) interval
D) ratio
Diff: 2 Page Ref: 198
31) Numeric data represent the numeric values of specific variables, which are ________ variables that can take on an infinite number of fractional values.
A) discrete
B) continuous
C) interval
D) ratio
Diff: 2 Page Ref: 198
32) Data mining seeks to identify patterns in the data. All of the following are major types of patterns except:
A) associations
B) regression
C) predictions
D) clusters
Diff: 1 Page Ref: 200
33) Predictive analysis uses sophisticated algorithms that can be designed to sift through data and identify ________.
A) patterns of behavior
B) outlier
C) average statistics
D) minimum and maximum statistics
Diff: 2 Page Ref: 200
34) ________, or supervised induction, is perhaps the most common of all data mining tasks. Its objective is to analyze the historical data stored in a database and automatically generate a model that can predict future behavior.
A) Association
B) Clustering
C) Prediction
D) Classification
Diff: 2 Page Ref: 201
35) ________ are essentially a hierarchy of if-then statements. They are most appropriate for categorical and interval data.
A) Neural nets
B) Clusters
C) Decision trees
D) Time-series
Diff: 3 Page Ref: 202
36) ________ data miningbegins with a proposition by the user, who then seeks to validate the truthfulness of the proposition. For example, a marketing manager may begin with the following proposition: "Are BluRay player sales related to sales of HDTV sets?"
A) Hypothesis-driven
B) Theory-driven
C) Discovery-driven
D) Data-driven
Diff: 2 Page Ref: 204
37) Because the data mining is driven by experience and experimentation, depending on the problem situation and the analyst's knowledge, the whole process can be ________ and ________, i.e., one should expect to go back and forth through the steps quite a few times.
A) simple; iterative
B) expensive; hypothetical
C) time consuming; iterative
D) time-consuming; hypothetical
Diff: 2 Page Ref: 207
38) Because the latter steps in the data mining process are built on the outcome of the former ones, one
should:
A) start with an understanding of the relevant data.
B) work quickly through the early steps and work in-depth on the latter steps.
C) start by cleaning the relevant data and storing it in a single data warehouse.
D) pay extra attention to the earlier steps in order not to put the whole study on an incorrect path from the onset.
Diff: 3 Page Ref: 208
39) The simple split methodology splits the data into two mutually exclusive subsets called a ________ set and a ________ set.
A) training; test
B) positive; negative
C) holdout; training
D) matrix; test
Diff: 2 Page Ref: 217
40) A good question to ask with respect to the patterns/relationships that association rule mining can discover is "Are all association rules interesting and useful?" In order to answer such a question, association rule mining uses two common metrics ________ and ________.
A) mean; median
B) support; confidence
C) standard deviation; confidence interval
D) regression; distance measure
Diff: 3 Page Ref: 226
41) ________ means that discovered patterns in a dataset hold true on new data with a sufficient degree of certainty.
42) Mass, length, time, energy, and electric charge are examples of ________ data because their scales have a nonarbitrary zero value.
43) ________ data contains codes assigned to objects or events as labels that also represent the rank order among them; for example, credit score.
44) ________ data contains measurements of simple codes assigned to objects as labels, such as marital status, but those labels are not measurements.
45) ________data represent the labels of multiple classes used to divide a variable into specific groups.
46) Using existing and relevant data, data mining builds models to identify ________ among the attributes presented in the dataset.
47) ________tells the nature of future occurrences of certain events based on what has happened in the past, such as predicting the winner of the Super Bowl or forecasting the absolute temperature of a particular day.
48) Generally speaking, data mining tasks can be classified into three main categories: ________, association, and clustering.
49) ________ partitions a collection of things, such as objects and events stored in a dataset, into segments whose members share similar characteristics.
50) With ________ forecasting, the data are a series of values of the same variable that is captured and stored over time. These data are then used to develop models to extrapolate the future values of the same phenomenon.
51) ________ data mining begins with a proposition by the user, who then seeks to validate the truthfulness of the proposition
52) ________ data miningfinds patterns, associations, and other relationships hidden within datasets. It can uncover facts that an organization had not previously known or contemplated.
53) ________ data, also known as categorical data, contains both nominal and ordinal data.
54) ________ data can be readily represented by some sort of probability distribution.
55) The model's ability to make reasonably accurate predictions, given noisy data or data with missing and erroneous values, is called ________.
56) With ________, a fixed number of instances from the original data is sampled (with replacement) for training and the rest of the dataset is used for testing. This process is repeated as many times as desired.
57) The ________ indexhas been used in economics to measure the diversity of a population. The same concept can be used to determine the purity of a specific class as a result of a decision to branch along a particular attribute or variable.
58) ________ measures the extent of uncertainty or randomness in a dataset.
59) The most commonly used measure to calculate the closeness between pairs of items in cluster analysis is the ________.
60) The ________algorithm is the most commonly used algorithm to discover association rules.
61) List three of the major characteristics and objectives of data mining.
62) Sketch a simple taxonomy of data in data mining.
63) Identify and describe the two types of categorical data. Give an example of each.
64) Identify and describe the two types of numerical data. Give an example of each.
65) List and briefly describe three of the major types of patterns that data mining attempts to identify.
66) List the six steps in the CRISP-DM Data Mining Process.
67) List the four data preprocessing steps.
68) List and briefly explain four of the factors to be considered when assessing a model to be used for classification.
69) Explain the simple split methodology for classification. Explain the advantages of the k-fold cross-validation methodology over the simple split methodology.
70) List five of the data mining mistakes often made in practice.
Chapter 6 Artificial Neural Networks for Data Mining
1) Neural network models are designed as exact replicas of how the human brain actually functions.
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2) Neural networks have been used in finance, marketing, manufacturing, operations, and information systems and in many business applications for pattern recognition, forecasting, prediction, and classification.
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3) The information processing in neural networks makes it attractive for solving complex problems.
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4) The human brain is composed of special cells called neurons. Neural networks are composed of interconnected processing elements called artificial neurons.
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5) Typically, the input-output transformation process at the individual neuron level is performed in a linear fashion.
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6) Minotaur was implemented to prevent fraud. In the first 3 months following installation of Minotaur, the average fraud loss per case was reduced by 40 percent.
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7) The processing elements (PE) of an ANN are artificial neurons, which receive inputs, process them, and deliver outputs.
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8) Each ANN is composed of a collection of neurons that are grouped into three types of layers: input, intermediate (or hidden), and output.
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9) Parallel processing resembles the way the brain and conventional computing works.
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10) In network information processing, each input corresponds to one or two attributes.
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11) Several types of data, such as text, pictures, and voice, can be used as inputs in network information processing.
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12) The output of a network contains the solution to a problem.
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13) Weights are crucial in network information processing because they store learned patterns of information; and it is through repeated adjustments of these weights that a network learns.
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14) A threshold value is a hurdle value for the output of a neuron to trigger the next level of neurons. If an output value is larger than the threshold value, it will not be passed to the next level of neurons.
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15) Supervised learning uses a set of inputs for which the desired outputs are known. For example, a dataset of loan applications with the success or failure of borrowers to repay their loans has a set of input parameters and known outputs.
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16) In neural network, larger data sets increase processing time during training but improve the accuracy of the training and often lead to faster convergence to a good set of weights.
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17) Training of artificial neural networks is an iterative process and the iteration continues until the error sum is converged to below a preset acceptable level.
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18) Implementation of an ANN often requires interfaces with other computer-based information systems and user training.
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19) A general Hopfield network is a single large layer of neurons with total interconnectivity.
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20) In general, ANN are suitable for problems whose inputs are both categorical and numeric, and where the relationships between inputs and outputs are linear or the input data are normally distributed.
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21) Which of the following is the reason why neural networks have been applied in business classification problems?
A) Able to learn the data
B) Able to learn the models' nonparametric nature
C) Its ability to generalize
D) All of the above
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22) An artificial neural network is composed of many interconnected ________.
A) artificial units
B) artificial cells
C) artificial neurons
D) artificial atoms
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23) Which of the following is a trait of an artificial neural network?
A) Fault tolerance
B) Duplicate cell
C) Self-repaired
D) Memory less
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24) Pioneers McCulloch and Pitts built their neural network model using a large number of interconnected ________ artificial neurons.
A) dual
B) binary
C) singular
D) serial
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25) There are about 50 to 150 billion neurons in the human brain and these neurons are partitioned into groups called ________.
A) teams
B) sects
C) groups
D) networks
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26) ANN can also be used as simple biological models to test ________ about biological neuronal information processing.
A) hypotheses
B) assumptions
C) theory
D) proposition
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27) ________ is the most commonly used network paradigm.
A) Parallel processing
B) Processing element
C) Minotaur
D) Backpropagation
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28) The way that information is processed by the neural network is a function of its ________.
A) composition
B) formation
C) structure
D) makeup
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29) The output of neurons can be the final result or it can be ________ to other neurons.
A) sources
B) contributions
C) keys
D) inputs
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30) In single, hidden-layer structured neural network, this hidden layer converts inputs into a ________ combination.
A) continuous
B) linear
C) nonlinear
D) nonstop
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31) The ways neurons are organized are referred to as ________.
A) topologies
B) contour
C) formation
D) configuration
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32) The connection weights express the ________ of the input data.
A) significance
B) value
C) mathematical value
D) worth
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33) The summation function computes the ________ sums of all the input elements entering each processing element.
A) weighted
B) averaged
C) total
D) aggregated
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34) Sigmoidfunction is an S-shaped transfer function in the range of 0 to 1 and is also a useful ________ transfer function.
A) integer
B) binary
C) linear
D) nonlinear
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35) Learning algorithms specify the ________ by which a neural network learns the underlying relationship between input and outputs.
A) process
B) method
C) route
D) direction
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36) The backpropagation learning algorithm is an iterative ________ technique designed to minimize an error function between the actual output of the network and its desired output, as specified in the training set of data.
A) differential equation
B) binary search
C) gradient-descent
D) exact search
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37) Most implementations of the learning process in neural network include a counterbalancing parameter called ________ to provide a balance to the learning rate.
A) power
B) energy
C) force
D) momentum
Diff: 2 Page Ref: 257
38) Which of the following is not a consideration in selecting a neural network structure?
A) Selection of a topology
B) Determination of input nodes
C) Determination of output nodes
D) Determination of weighting functions
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39) Which of the following procedure is used to break datasets into different pairs of training and testing sets?
A) resampling
B) sampling
C) trial and error
D) random
Diff: 2 Page Ref: 267
40) Because of their ability to capture and represent highly complex relationships, a new and prosperous area of application for neural networks is in the field of ________.
A) health care and medicine
B) transportation and distribution
C) security
D) financial planning
Diff: 2 Page Ref: 275
41) A(n) ________ network represents a brain metaphor of information processing.
42) ________ refers to a pattern recognition methodology for machine learning.
43) Each biological neuron possesses axons and ________, finger-like projections that enable the neuron to communicate with its neighboring neurons by transmitting and receiving electrical and chemical signals.
44) ANN stands for ________.
45) The early neural network model is called ________.
46) ________ is the central processing portion of the biological neuron.
47) A ________ is able to increase or decrease the strength of the connection from neuron to neuron.
48) There are several neural network paradigms, and one of the easiest ways to differentiate between the various models is on the basis of how these models structurally ________ the human brain.
49) One popular approach, known as the feedforward-backpropagation paradigm, in organizing neurons, does not allow any ________ linkage.
50) A neural network is composed of processing elements organized in different ways to form the network's ________.
51) The artificial neurons receive the information from external input stimuli, perform a ________ on the inputs, and then pass on external outputs.
52) In a neural network, the knowledge is stored in the ________ associated with each connection between two neurons.
53) A ________ is a layer of neurons that takes input from the previous layer and converts those inputs into outputs for further processing.
54) When information is processed, many of the processing elements of neural network perform their computations at the same time, which is called ________ processing.
55) The purpose of the neural network is to compute the ________ of the output.
56) In neural network, it is through repeated adjustments of ________ that the network learns.
57) ________ value is a hurdle value for the output of a neuron to trigger the next level of neurons.
58) The ________ is the training procedure used by an artificial neural network.
59) In ________, the network is self-organizing; that is, it organizes itself internally so that each hidden processing element responds strategically to a different set of input stimuli.
60) ________ testing is used to comparing test results to historical results.
61) List the relationships between biological and artificial networks.
62) Sketch or describe the typical structure of an ANN.
63) Describe the five major concepts / components of neural network information processing.
64) Explain threshold value and its role in the network.
65) Explain supervised and unsupervised learning modes of neural networks.
66) List the usual process of general learning in neural network.
67) Describe or sketch the supervised learning process of an ANN
68) Briefly describe backpropagation.
69) List the procedures of the learning algorithm.
70) List the development process for an ANN application.
Chapter 7 Text and Web Mining
1) DARPA and MITRE teamed up to develop capabilities to automatically filter text-based information sources to generate actionable information in a timely manner.
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2) A vast majority of all business data are captured and stored in structured text documents.
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3) Text mining is important to competitive advantage because knowledge is power, and knowledge is derived from text data sources.
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4) The purpose and processes of text mining are different from those of data mining because with text mining the input to the process are data files such as Word documents, PDF files, text excerpts, and XML files.
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5) The benefits of text mining are greatest in areas where very large amounts of textual data are being generated, such as law, academic research, finance, and medicine.
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6) Unstructured data has a predetermined format. It is usually organized into records as categorical, ordinal, and continuous variables and stored in databases.
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7) Stemming is the process of reducing inflected words to their base or root form.
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8) Stop words, such as a, am,the, and was, are words that are filtered out prior to or after processing of natural language data.
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9) The goal of natural language processing (NLP) is syntax-driven text manipulation.
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10) Two advantages associated with the implementation of NLP are word sense disambiguation and syntactic ambiguity.
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11) By applying a learning algorithm to parsed text, researchers from Stanford University's NLP lab have
developed methods that can automatically identify the concepts and relationships between those concepts in the text.
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12) Text mining can be used to increase cross-selling and up-selling by analyzing the unstructured data generated by call centers.
Diff: 1 Page Ref: 296
13) Compared to polygraphs for deception-detection, text-based deception detection has the advantages of being nonintrusive and widely applicable to textual data and transcriptions of voice recordings.
Diff: 2 Page Ref: 297
14) The corpus for the text mining process consists of organized ACII text files and structured data.
Diff: 2 Page Ref: 303
15) The main categories of knowledge extraction methods are recall, search, and signaling.
Diff: 2 Page Ref: 307
16) Web pages consisting of unstructured textual data coded in HTML or XML, hyperlink information, and logs of visitors' interactions provide rich data for effective and efficient knowledge discovery:
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17) Web crawlers are Web content mining tools that are used to read through the content of a Web site automatically.
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18) Amazon.com leverages Web usage history usage dynamically and recognizes the user by reading a cookie written by a Web site on the visitor's computer.
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19) The quality of search results is impossible to measure accurately using strictly quantitative measures such as click-through rate, abandonment, and search frequency. Additional quantitative and qualitative measures are required.
Diff: 2 Page Ref: 318
20) Customer experience management applications gather and report direct feedback from site visitors by benchmarking against other sites and offline channels, and by supporting predictive modeling of future visitor behavior.
Diff: 3 Page Ref: 320
21) A vast majority of business data are stored in text documents that are ________.
A) mostly quantitative
B) virtually unstructured
C) semi-structured
D) highly structured
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22) Text miningis the semi-automated process of extracting ________ from large amounts of unstructured data sources.
A) patterns
B) useful information
C) knowledge
D) all of the above
Diff: 2 Page Ref: 289
23) All of the following are popular application areas of text mining except:
A) information extraction
B) document summarization
C) question answering
D) data structuring
Diff: 2 Page Ref: 289
24) Which of the following correctly defines a text mining term?
A) Tagging is the number of times a word is found in a specific document.
B) A token is an uncategorized block of text in a sentence.
C) Rooting is the process of reducing inflected words to their base form.
D) A term is a single word or multiword phrase extracted directly from the corpus by means of NLP methods.
Diff: 3 Page Ref: 290
25) ________ is a branch of the field of linguistics and a part of natural language processing that studies the internal structure of words.
A) Morphology
B) Corpus
C) Stemming
D) Polysemes
Diff: 2 Page Ref: 290
26) Using ________ as a rich source of knowledge and a strategic weapon, Kodak not only survives but excels in its market segment defined by innovation and constant change.
A) visualization
B) deception detection
C) patent analysis
D) semantic cues
Diff: 2 Page Ref: 291
27) It has been shown that the bag-of-word method may not produce good enough information content for text mining tasks. More advanced techniques such as ________ are needed.
A) classification
B) natural language processing
C) evidence-based processing
D) symbolic processing
Diff: 2 Page Ref: 292
28) Why will computers probably not be able to understand natural language the same way and with the same accuracy that humans do?
A) A true understanding of meaning requires extensive knowledge of a topic beyond what is in the words, sentences, and paragraphs.
B) The natural human language is too specific.
C) The part of speech depends only on the definition and not on the context within which it is used.
D) All of the above.
Diff: 3 Page Ref: 293
29) At a very high level, the text mining process consists of each of the following tasks except:
A) Create log frequencies.
B) Establish the corpus.
C) Create the term-document matrix.
D) Extract the knowledge.
Diff: 2 Page Ref: 304
30) In ________, the problem is to group an unlabelled collection of objects, such as documents, customer comments, and Web pages into meaningful groups without any prior knowledge.
A) search recall
B) classification
C) clustering
D) grouping
Diff: 2 Page Ref: 307
31) The two main approaches to text classification are ________ and ________.
A) knowledge engineering; machine learning
B) categorization; clustering
C) association; trend analysis
D) knowledge extraction;
Diff: 2 Page Ref: 307
32) Commercial software tools include all of the following except:
A) GATE
B) IBM Intelligent Miner Data Mining Suite
C) SAS Text Miner
D) SPSS Text Mining
Diff: 2 Page Ref: 312
33) Why does the Web pose great challenges for effective and efficient knowledge discovery?
A) The Web search engines are indexed-based.
B) The Web is too dynamic.
C) The Web is too specific to a domain.
D) The Web infrastructure contains hyperlink information.
Diff: 2 Page Ref: 313
34) A simple keyword-based search engine suffers from several deficiencies, which include all of the following except:
A) A topic of any breath can easily contain hundreds or thousands of documents.
B) Many documents that are highly relevant to a topic may not contain the exact keywords defining them.
C) Web mining can identify authoritative Web pages.
D) Many of the search results are marginally or not relevant to the topic.
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35) Which of the following is not one of the three main areas of Web mining?
A) Web search mining
B) Web content mining
C) Web structure mining
D) Web usage mining
Diff: 2 Page Ref: 314
36) Which of the following refers to developing useful information from the links included in the Web documents?
A) Web content mining
B) Web subject mining
C) Web structure mining
D) Web matter mining
Diff: 2 Page Ref: 315
37) A ________ is one or more Web pages that provide a collection of links to authoritative pages, reference sites, or a resource list on a specific topic.
A) hub
B) hyperlink-induced topic search
C) spoke
D) community
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38) All of the following are types of data generated through Web page visits except:
A) data stored in server access logs, referrer logs, agent logs, and client-side cookies
B) user profiles
C) hyperlink analysis
D) metadata, such as page attributes, content attributes, and usage data
Diff: 2 Page Ref: 316
39) When registered users revisit Amazon.com, they are greeted by name. This task involves recognizing the user by ________.
A) pattern discovery
B) association
C) text mining
D) reading a cookie
Diff: 1 Page Ref: 317
40) Forward-thinking companies like Ask.com, Scholastic, and St. John Health System are actively using Web mining systems to answer important questions of "Who?" "Why?" and "How?" The benefits of integrating these systems:
A) are measured qualitatively in terms of customer satisfaction, but not measured using financial or other quantitative measure.
B) can be significant in terms of incremental financial growth and increasing customer loyalty and satisfaction.
C) have not yet outweighed the costs of the Web mining systems and analysis.
D) can be infinitely measurable.
Diff: 3 Page Ref: 319
41) ________ is the semi-automated process of extracting patterns from large amounts of unstructured data sources.
42) ________ is the process of identifying valid, novel, potentially useful, and ultimately understandable patterns in data stored in structured databases, where the data are organized in records structured by categorical, ordinal, or continuous variables.
43) ________ is the grouping of similar documents without having a predefined set of categories.
44) In linguistics, a(n) ________ is a large and structured set of texts prepared for the purpose of conducting knowledge discovery.
45) ________ is the process of reducing inflected words to their base or root form.
46) ________ words or noise words are words that are filtered out prior to or after processing of natural language data.
47) The term "stop-words" are used by text mining to ________ commonly used words.
48) ________ is an important component of text mining and is a subfield of artificial intelligence and computational linguistics. It studies the problem of understanding the natural human language.
49) ________ is a technique used to detect favorable and unfavorable opinions toward specific products and services using textual data sources, such as customer feedback in Web postings and the detection of unfavorable rumors.
50) At a very high level, the first of three consecutive tasks in the text mining process is to establish the ________, which is a list of organized documents.
51) In the text mining process, the output of task two is a flat file called a ________ where the cells are populated with the term frequencies.
52) One of the main approaches to text classification is ________ in which an expert's knowledge is encoded into the system either declaratively or in the form of procedural classification rules.
53) ________ is the discovery and analysis of interesting and useful information from the Web, about the Web, and usually though Web-based tools.
54) A(n) ________ is one or more Web pages that provide a collection of links to authoritative pages.
55) ________ mining is the process of extracting useful information from the links embedded in Web documents.
56) ________ mining is the extraction of useful information from data generated through Web page visits and transactions.
57) Analysis of the information collected by Web servers can help better understand user behavior. Analysis of this data is called ________ analysis.
58) ________ applications focus on "who and how" questions by gathering and reporting direct feedback from site visitors, by benchmarking against other sites and offline channels, and by supporting predictive modeling of future visitor behavior.
59) Web analytics, CEM, and VOC applications form the foundation of the Web site ________ ecosystem that supports the online business's ability to positively influence desired outcomes
60) The ________ model, which is one where multiple sources of data describing the same population are integrated to increase the depth and richness of the resulting analysis, forms the framework of the Web site optimization ecosystem
61) Compare and contrast text mining and data mining.
62) Why will computers probably not be able to understand natural language the same way and with the same accuracy that humans do?
63) NLP has successfully been applied to a variety of tasks via computer programs to automatically process natural human language that previously could only be done by humans. List three of the most popular of these tasks.
64) Describe a marketing application of text mining.
65) What is the primary purpose of text mining within the context of knowledge discovery?
66) Diagram and explain the three-step text mining process.
67) List two options for managing or reducing the dimensionality (size) of the term-document matrix (TDM).
68) What are three of the challenges for effective and efficient knowledge discovery posed by the Web?
69) Define the three main areas of Web mining and each area's source of information.
70) List three business applications of Web mining.
Chapter 8 Data Warehousing
1) A real-time data warehouse together with a decision support strategy that leverages the integrated data can provide significant financial benefits for an organization.
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2) A data warehouse differs from an operational database in that most data warehouses have a product orientation and are designed to handle transactions that update the database.
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3) A data warehouse maintains historical data that do not necessarily provide current status, except in real-time systems.
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4) Once the data are entered into the data warehouse, users cannot change or update the data.
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5) There are three main types of data warehouses, which are data marts, operational data stores, and enterprise data warehouses.
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6) An independent data mart is a small warehouse designed for a strategic business unit (SBU) or a department whose source is an EDW.
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7) Operational data store is used for the medium- and long-term decisions associated with the enterprise data warehouse (EDW).
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8) An operational data store (ODS) provides a fairly recent form of a customer information file (CIF), which is often used as an interim staging area for a data warehouse.
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9) The design, creation, and use of metadata and its accompanying standards may involve ethical issues, including privacy and intellectual property issues.
Diff: 1 Page Ref: 333
10) There are five levels of metadata management maturity that can be used to describe where an organization is in terms of how and how well it utilizes its metadata.
Diff: 2 Page Ref: 333
11) Data warehouses contain vast amounts of internal data but are limited because they do not contain external data.
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12) There are many middleware tools that business users can use to access data stored in the data repositories, including data mining, reporting tools, and data visualization.
Diff: 1 Page Ref: 334
13) In a three-tier architecture, operational systems contain the data and the software for data acquisition in the first tier, the data warehouse is a second tier, and the third tier includes the DSS/BI/BA engine.
Diff: 2 Page Ref: 335
14) An advantage of the hub-and-spoke data warehouse architecture is that they are easy to build.
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15) The centralized data warehouse helps to simplify data management and administration.
Diff: 2 Page Ref: 339
16) Because of performance and data quality issues, most experts agree that federated approaches work well to replace data warehouses.
Diff: 1 Page Ref: 339
17) According to conventional wisdom, independent data marts are a poor architectural solution.
Diff: 2 Page Ref: 341
18) ETL tools transport data between sources and targets, document how data elements change as they move between source and target, exchange metadata with other applications, and administer all runtime processes and operations.
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19) A hosted data warehouse has less functionality than an onsite data warehouse, but it does not consume computer resources on client premises for computer upgrades, software licenses, in-house development, and in-house support and maintenance.
Diff: 2 Page Ref: 352
20) A data warehouse needs to support scalability, which pertains to the amount of data in the warehouse, how quickly the warehouse is expected to grow, the number of concurrent users, and the complexity of user queries.
Diff: 3 Page Ref: 358
21) When DirectTV decided to implement an active data warehouse solution, the goal of the new system was to send fresh data to the call center at least daily. Once the capabilities of the solutions became apparent, that goal:
A) dropped to fresh data of less than 15 minutes to improve responsiveness.
B) dropped to fresh data every 12 hours to improve responsiveness.
C) increased to every 2 days to reduce maintenance costs.
D) increased to every 5 days to reduce maintenance costs.
Diff: 2 Page Ref: 327
22) Data warehouse is a(n) ________, integrated, time-variant, nonvolatile collection of data in support of management's decision making process.
A) analysis-oriented
B) object-oriented
C) subject-oriented
D) model-oriented
Diff: 2 Page Ref: 329
23) Once data are entered into the warehouse, users cannot change or update the data. Obsolete data are discarded, and changes are recorded as new data. This ________ characteristic is one of the characteristics of data warehousing.
A) changeable
B) nonvolatile
C) nonperishable
D) static
Diff: 2 Page Ref: 329
24) A data warehouse contains ________ about how data are organized and how to use them effectively.
A) a data directory
B) a data index
C) data fields
D) metadata
Diff: 2 Page Ref: 330
25) The high cost of data warehouses limits their use to large companies. As an alternative, many firms use a lower-cost, scaled-down version of a data warehouse referred to as (an) ________.
A) data mart
B) operational data store
C) dependent data mart
D) independent data mart
Diff: 2 Page Ref: 330
26) Which of the following are created when operational data need to be analyzed multidimensionally?
A) Oper marts
B) Customer information file
C) Dependent data marts
D) Independent data marts
Diff: 2 Page Ref: 330
27) Which of the following is one of the components of data warehousing process that enables users to access the data warehouse?
A) Middleware tools
B) Users interface
C) Query tools
D) OLAP
Diff: 2 Page Ref: 334
28) Which of the following is not a data source to a data warehouse?
A) ERP
B) legacy
C) POS
D) ETL
Diff: 2 Page Ref: 334
29) The advantage of three-tier architecture for data warehousing is its separation of the functions of the data warehouse, which eliminates resource constraints and makes it possible to easily create data ________.
A) banks
B) cubes
C) bases
D) marts
Diff: 1 Page Ref: 335
30) The ________ have inconsistent data definitions and different dimensions and measures, making it difficult to analyze data across those marts.
A) enterprise data marts
B) operational data marts
C) dependent data marts
D) independent data marts
Diff: 2 Page Ref: 338
31) Users demanding access via PDAs and through speech recognition and synthesis is becoming more commonplace, further complicating ________ issues.
A) data extraction
B) data load
C) data integration
D) OLAP
Diff: 1 Page Ref: 342
32) Which of the following is an evolving tool space that promises real-time data integration from a variety of sources, such as relational databases, Web services, and multidimensional databases?
A) Information integration
B) Data management integration
C) SQL data integration
D) Enterprise information integration (EII)
Diff: 2 Page Ref: 344
33) ETL process consists of extract, transform, and load. Transformation occurs by using ________ or lookup tables or by combining the data with other data.
A) rules
B) policies
C) strategies
D) procedures
Diff: 2 Page Ref: 345
34) Karacsony indicates that there is a direct correlation between the extent of ________ data and the amount of ETL processes. When data are managed correctly as an enterprise asset, ETL efforts are significantly reduced.
A) enormous
B) bad
C) redundant
D) wrong
Diff: 3 Page Ref: 346
35) Which of the following is not a direct benefit of a data warehouse?
A) End users can perform extensive analysis in numerous ways
B) A consolidated view of the data provides a single version of the truth
C) Simplified data access
D) Improved customer service and satisfaction
Diff: 2 Page Ref: 346
36) Guidelines that need to be considered when developing a vendor list include all of the following except:
A) financial strength
B) trade shows
C) ERP linkages
D) market share
Diff: 2 Page Ref: 348
37) A star schema contains a central ________ surrounded by several dimension tables.
A) database
B) fact table
C) data tree
D) data table
Diff: 2 Page Ref: 351
38) Which of the following is not one of the failure factors in data warehousing as identified by Turban et al.?
A) Cultural issues are ignored.
B) inappropriate architecture
C) unrealistic expectations
D) high levels of data summarization
Diff: 3 Page Ref: 355
39) ________ is a critical aspect of data warehousing that includes reconciling conflicting data definitions and formats organization-wide.
A) Data modification
B) Fact refinement
C) Data purification
D) Data cleansing
Diff: 2 Page Ref: 356
40) Which of the following is needed to determine how data are to be retrieved from a data warehouse, and will assist in the physical definition of the warehouse by helping to define which data require indexing?
A) Indexing modeling
B) Retrieval modeling
C) Access modeling
D) Tactic modeling
Diff: 2 Page Ref: 357
41) Data often are fragmented in distinct operational systems, so managers often make decisions with partial information at best. ________ cuts through this obstacle by accessing, integrating, and organizing key operational data in a form that is consistent, reliable, timely, and readily available where needed.
42) ________ is a subset that is created directly from the data warehouse. It has the advantages of using a consistent data model and providing quality data.
43) An ________ is a large-scale data warehouse that is utilized across the enterprise for decision support.
44) ________ provides a fairly recent form of customer information files (CIF). It is a type of database often used as an interim staging area for a data warehouse.
45) ________ is a small data warehouse designed for a strategic business unit (SBU)or a department.
46) In three-tier architecture for data warehouse, ________ contain the data and the software for data acquisition in one tier, the data warehouse is another tier, and the third tier includes the decision support and the client.
47) The ________ is a concession to the natural forces that undermine the best plans for developing a perfect system. It uses all possible means to integrate analytical resources from multiple sources to meet changing needs or business conditions.
48) ________ comprises three major processes that, when correctly implemented, permits data to be accessed and made accessible to an array of ETL and analysis tools and data warehousing environment.
49) EII (enterprise information integration) tools use predefined metadata to populate views that make integrated data appear relational to end-users. ________ may be the most important aspect of EII, because it allows data to be tagged either at the time of creation or later.
50) One of the benefits of a well-designed data warehouse is that business rules can be stored in a ________ repository and applied to the data warehouse centrally.
51) A data warehouse contains numerous ________ that define such things as how the data will be used, summarization rules, standardization of encoded attributes, and calculation rules.
52) The ________ is a scaled-down version of the data warehouse that centers on the requests of a specific department, such as marketing or sales.
53) The data warehouse design is based upon the concept of ________ modeling, which is a retrieval-based model that supports high-volume query access.
54) A(n) ________ contains the attributes needed to perform decision analysis, descriptive attributes used for query reporting, and foreign keys to link to dimension tables.
55) A(n) ________ data warehouse has nearly the same, if not more, functionality as an on-site data warehouse, but it does not consume computer resources on client premises.
56) It is important to identify the right level of ________ that will be needed during the scoping of a data warehouse project. A low level of that will result in more data being stored in the warehouse.
57) During data modeling, expertise is required to determine what data are needed, define business rules associated with the data, and decide what ________ and other calculations may be necessary.
58) The main issues pertaining to ________ are the amount of data in the warehouse, how quickly the warehouse is expected to grow, the number of concurrent users, and the complexity of user queries.
59) ________ is the process of loading and provides data via the data warehouse as they become available.
60) ________ is the person responsible for the administration and management of a data warehouse.
61) List four characteristics of a data warehouse.
62) Describe the data warehousing process.
63) What are the issues to consider when deciding which architecture for data warehousing to use?
64) Describe two of the alternative architectures to the basic architectural design types in data warehousing.
65) List 5 factors that potentially affect the architecture selection decision.
66) Describe various integration technologies that enable data and metadata integration.
67) Describe various issues that affect whether an organization will purchase data transformation tools or build the transformation process itself.
68) Describe a star schema.
69) List five benefits of a hosted data warehouse.
70) Identify at least five data warehouse best practices.
Chapter 9 Business Performance Management
1) Business performance management (BPM) is an outgrowth of decision support systems (DSS), enterprise information systems (EIS), and business intelligence (BI).
Diff: 1 Page Ref: 374
2) The term business performance management (BPM) refers to the business processes, methodologies, metrics, and technologies used by enterprises to measure, monitor, and manage business performance.
Diff: 1 Page Ref: 378
3) During the strategic planning process, the time horizon is determined by the company's market share; rate of technological innovation; and capital intensity of the industry.
Diff: 2 Page Ref: 380
4) For a low-cost provider such as Wal-Mart, distribution capabilities are a critical success factor.
Diff: 1 Page Ref: 380
5) The Palladium Group found that 75 percent of organizations tied their budgets to their strategic plans.
Diff: 1 Page Ref: 382
6) An operational plantranslates an organization's strategic objectives and goals into a set of well-defined tactics and initiatives, resource requirements, and expected results for some future time period, usually, but not always, a month.
Diff: 1 Page Ref: 382
7) In a budget-centric operational plan, tactics are established to meet the objectives and targets established in the strategic plan.
Diff: 1 Page Ref: 382
8) An organization's strategic objectives and key metrics should serve as top-down drivers for the allocation of an organization's tangible and intangible assets.
Diff: 2 Page Ref: 383
9) A comprehensive framework for monitoring performance should address two key issues: what to monitor and how to monitor.
Diff: 2 Page Ref: 383
10) The average knowledge worker spent less than 20 percent of his or her time focused on higher-value analytical and decision support tasks, according to the Saxon Group's findings.
Diff: 2 Page Ref: 389
11) An effective performance measurement system should not change measurements even when the underlying processes and strategies change.
Diff: 1 Page Ref: 395
12) Both balanced Scorecards and Six Sigma are performance management tools and methodologies.
Diff: 1 Page Ref: 395
13) Six Sigma is a performance management methodology aimed at reducing the number of defects in a business process to as close to zero DPMO (defects per million opportunities) as possible.
Diff: 2 Page Ref: 399
14) Unlike BPM, DMAIC is an open-loop business improvement model that encompasses the steps of defining, measuring, analyzing, improving, and controlling a process.
Diff: 2 Page Ref: 399
15) Lean manufacturing focuses on the elimination of waste or non-value-added activities, whereas Six Sigma focuses on reducing the variation or improving the consistency of a process.
Diff: 2 Page Ref: 400
16) Six Sigma is drastically different from other business initiatives.
Diff: 1 Page Ref: 401
17) To dramatically increase the success of Six Sigma, the Six Sigma results should "pay as you go" and be confirmed by objective parties.
Diff: 2 Page Ref: 402
18) Operational dashboards are used by managers and analysts to track, on weekly basis, raw data generated from departmental processes and projects.
Diff: 2 Page Ref: 409
19) The primary challenge of dashboard design is to display all the required information to be displayed clearly and without distraction on a single screen in a manner that can be assimilated quickly.
Diff: 1 Page Ref: 409
20) With comparative measures, it is important to point out whether a particular number is good or bad and whether it is trending in the right direction. Without these designations, it can be time-consuming to determine the status of a particular number or result.
Diff: 2 Page Ref: 410
21) What was the most important service provided by Harrah's Total Rewards program?
A) It provided Harrah's with a vast collection of high volume, real-time transaction data about its customers and their behaviors.
B) The program served to reward customers with cash for their gaming.
C) The program served to reward customers with comps for their gaming.
D) Opulent accommodations and surroundings for loyal customers.
Diff: 2 Page Ref: 375
22) The term business performance management (BPM) encompasses three key components, which include all of the following except:
A) A set of integrated, closed-loop management and analytic processes, supported by technology, that address financial as well as operational activities
B) An enterprise-wide strategy that helps to optimize local business performance
C) Tools for businesses to define strategic goals and then measure and manage performance against those goals
D) A core set of processes, including financial and operational planning, modeling, analysis, and monitoring of key performance indicators (KPIs), linked to organizational strategy
Diff: 3 Page Ref: 378
23) BPM is an enterprise-wide strategy that seeks to prevent organizations from optimizing ________ business at the expense of overall corporate performance.
A) corporate wise
B) global
C) regional
D) local
Diff: 2 Page Ref: 378
24) BPM helps organizations translate a unified set of objectives into plans, monitor execution, and deliver critical insight to improve financial and ________ performance.
A) strategic
B) tactical
C) operational
D) daily
Diff: 1 Page Ref: 380
25) Which of the following identifies and prioritizes the key customer, market, competitor, government, demographic, or actually impacting the company?
A) SWOT
B) SWAT
C) ROA
D) CSF
Diff: 1 Page Ref: 380
26) A(n) ________ plan translates an organization's strategic objectives and goals into a set of well-defined tactics and initiatives, resources requirements, and expected results for some future time period.
A) business
B) operational
C) tactical
D) strategic
Diff: 1 Page Ref: 381
27) Fundamentally, an operational plan is like a project plan that is designed to ensure that an organization's ________ is realized.
A) business policy
B) plan
C) strategy
D) business rules
Diff: 1 Page Ref: 382
28) Best practice organizations tend to utilize ________ operational planning, which begins the operational planning process by defining the alternative tactics and initiatives that can be used to reach a particular target.
A) tactic-centric
B) budget-centric
C) cost-centric
D) revenue-centric
��Diff: 1 Page Ref: 382
29) An organization's strategic objectives and key metrics should serve as ________ drivers for the allocation of an organization's tangible and intangible assets.
A) bottom-up
B) top-down
C) company wide
D) revenues
Diff: 1 Page Ref: 383
30) Which of the following is not a part of a cybernetic system?
A) Inputs
B) Standard
C) Feedback channel
D) Diagnostic mechanism
Diff: 3 Page Ref: 384
31) An effective diagnostic control system encourages ________.
A) management by exception
B) strict rules
C) democratic rules
D) elite rules
Diff: 2 Page Ref: 384
32) The effectiveness of a campaign is measured by ________.
A) net cost and productivity
B) relative profitability and net value
C) gross revenue and net income
D) cost and quality
Diff: 2 Page Ref: 388
33) Saxon Group's benchmarking results indicate that best practice organizations:
A) focus on competition instead of on cause-and-effect relationships between tactics and objectives.
B) develop better predictions or plans.
C) are far better equipped to quickly identify changes or problems, diagnose the root causes, and take corrective action.
D) are historic and internally focused.
Diff: 2 Page Ref: 389
34) Which of the following is not what an effective performance measurement system should do?
A) Align top-level strategic objectives and bottom-level initiatives.
B) Identify opportunities in a timely fashion.
C) Determine priorities and allocate resources based on those priorities.
D) Maintain measurement when the underlying processes and strategies change.
Diff: 2 Page Ref: 395
35) Which of the following is the best-known and most widely used performance management system?
A) Dashboard
B) Performance reengineering
C) Balanced scorecard (BSC)
D) Total quality management
Diff: 1 Page Ref: 395
36) BSC translates an organization's vision and strategy into a set of interrelated financial and nonfinancial objectives. All of the following are nonfinancial objectives except:
A) Business rules
B) Customers
C) Internal business process
D) Learning and growth
Diff: 1 Page Ref: 396
37) A ________ delineates the process of value creation through a series of cause-and-effect relationships among the key organizational objectives for all four BSC perspectives--financial, customer, process, and learning and growth.
A) balanced scorecard
B) strategic theme
C) strategy map
D) KPI
Diff: 2 Page Ref: 397
38) Sigma, σ, is a Greek alphabet letter used by statisticians to measure the ________ in a process.
A) variance
B) mean
C) inconsistency
D) variability
Diff: 2 Page Ref: 399
39) Which of the following about Six Sigma is not true?
A) Six Sigma focuses on the elimination of waste activities, whereas lean focuses on reducing the variation or improving the consistency of a process.
B) Most companies use Six Sigma as a process improvement methodology that enables them to
scrutinize their processes, pinpoint problems, and apply remedies.
C) Six Sigma is a performance management methodology aimed at reducing the number of defects in a business process to as close to zero DPMO as possible.
D) Six Sigma uses DMAIC, a closed-loop business improvement model that involves the steps of defining, measuring, analyzing, improving, and controlling a process.
Diff: 3 Page Ref: 399
40) Logically speaking, a BPM system consists of three basic parts, or layers. Which of the following is not one of those parts or layers?
A) BPM applications
B) Dashboards and scorecards
C) Information hub
D) Source systems
Diff: 2 Page Ref: 404
41) ________ is a framework for organizing, automating, and analyzing business methodologies, metrics, processes, and systems to drive the overall performance of the enterprise.
42) ________ outline those things that an organization must excel at to be successful in their market space.
43) A(n) ________ is a standard strengths, weaknesses, opportunities, and threats (SWOT) assessment of the company.
44) ________ is used to identify and prioritize the internal strengths and weaknesses in an organization's processes, structures, and its technologies and applications.
45) A ________ is the quantification of an objective for a designated period of time. For example, if an organization has an objective of increasing profitability, that objective is turned into quantified targets
46) In a ________ plan, tactics are established to meet the objectives and targets established in the strategic plan.
47) Most companies use ________ to monitor organizational performance and correct deviations from present performance standards.
48) KPIs stand for ________, which are strategically aligned metrics.
49) Targets are measured against a baseline or ________.
50) A ________ delineates the relationships among the key organizational objectives for all BSC perspectives.
51) A ________ is a set of activities that transform a set of inputs that include suppliers, assets, resources, and information into a set of outputs for another person or process.
52) Six Sigma is a performance management methodology aimed at reducing the number of defects in a business process to as close to ________ as possible.
53) DMAIC is a ________ business improvement model.
54) To achieve a Six Sigma level of performance, the company would have to reduce the number of defects to no more than ________ DPMO.
55) Six Sigma and Lean Production both deal with ________.
56) ________ focuses on the elimination of waste or non-value–added activities.
57) ________ focuses on reducing the variation or improving the consistency of a process.
58) In recent years, there has been a focus on combining the Six Sigma methodology with the ________.
59) ________ refers to both the logical and physical design of a system.
60) Dashboards and ________ both provide visual displays of important information that is consolidated and arranged on a single screen so that information can be digested at a single glance and easily explored.
61) What are the three key components of business performance management (BPM)?
62) Describe or sketch the BPM cycle.
63) Describe the common tasks in strategic planning process.
64) A number of surveys have highlighted the gap that routinely exists in organizations between their strategic plans and the execution of those plans. What are the reasons for this strategy gap?
65) Describe the conditions under which an information system can be used as diagnostic control system.
66) Describe the series of three steps in the discovery-driven planning (DDP).
67) Explain three of the drawbacks or limitations of using financial data as the core of a performance measurement system.
68) List the basic ingredients of good performance measures.
69) Describe the steps in DMAIC performance model.
70) What are the characteristics of well-designed dashboards and scorecards?
Chapter 10 Collaborative Computer-Supported Technologies and
Group Support Systems
1) Most of the complex decisions in organizations are made by groups whose members work together in the same location and at the same time.
Diff: 1 Page Ref: 420
2) One of the greatest benefits of using computer-supported collaboration tools is anonymity when there is tension or sensitive topics within groups.
Diff: 2 Page Ref: 422
3) One of the characteristics of groupwork is that a group can be at one managerial level or can span across several levels.
Diff: 1 Page Ref: 423
4) There is never a tendency for poor quality compromised solutions in groupwork.
Diff: 1 Page Ref: 425
5) A group may produce synergy during problem solving, which means that the time to reach a high quality decision is greater for group decision making than for independent individuals.
Diff: 2 Page Ref: 425
6) Nominal group technique (NGT) uses questionnaires for technological forecasting and for forecasting of sensitive issues.
Diff: 2 Page Ref: 426
7) A large part of our communication is conveyed via nonverbal cues.
Diff: 1 Page Ref: 430
8) The advancement of Web-based systems such as webex.com and gotomeetings.com opens the door for improved electronically supported virtual meetings.
Diff: 1 Page Ref: 430
9) Groupware products are either stand-alone products that support only one task, such as videoconferencing, or are integrated kits consisting of several tools.
Diff: 1 Page Ref: 431
10) Instant messaging, audio conferencing, and polling are asynchronous groupware tools.
Diff: 1 Page Ref: 432
11) Collaborators can work together on the same document, spreadsheet, or graphics using the screen sharing software.
Diff: 1 Page Ref: 435
12) Intraspect from Vignette Corp. allows employees to create Web sites, invite co-workers to join discussions and post documents.
Diff: 1 Page Ref: 436
13) The Windows Meeting Space client is included in the Windows operating system.
Diff: 1 Page Ref: 437
14) WebEx delivers active and interactive presentations, allows real-time collaboration, enhances demonstration of products and services, and assists in document management.
Diff: 2 Page Ref: 438
15) Successful enterprise-wide collaboration systems such as Lotus Notes/Domino can be
inexpensive to develop and operate because no support staff is required.
Diff: 2 Page Ref: 440
16) A major characteristic of GDSSs is that they contain built-in mechanisms that discourage development of negative group behaviors, such as destructive conflict miscommunication and groupthink.
Diff: 2 Page Ref: 441
17) Voice over IP (VoIP) are communication systems that transmit voice calls over circuit-based networks.
Diff: 1 Page Ref: 453
18) In contrast with commercial portals such as Yahoo! and MSN, which are gateways to general information on the Internet, corporate portals provide a single point of access to information and applications available on the Internet, intranets, and extranets of a specific organization.
Diff: 2 Page Ref: 456
19) The idea of CPFR is achieve fewer out-of-stock situations and resultant lost sales by increasing inventory levels in the supply chain.
Diff: 2 Page Ref: 457
20) Personality-related creativity traits include inventiveness, independence, individuality, enthusiasm, and flexibility, and these traits have been assessed through the widely used Torrance Tests of Creative Thinking.
Diff: 2 Page Ref: 462
21) Which of the following activities and processes is not a characteristic of meetings?
A) Differences in opinions are settled by the ranking person present and not through negotiation or arbitration.
B) A meeting is a joint activity engaged in by a group of people typically of equal or nearly equal status.
C) The outcome of a meeting depends partly on the knowledge, opinions, and judgments of its participants and the support they give to the outcome.
D) The process of group decision making can create benefits as well as dysfunctions.
Diff: 2 Page Ref: 424
22) Which of the following refers to a group process wherein people begin thinking alike and not being tolerant of new ideas?
A) Group brainwash
B) Group politics
C) Group gain
D) Groupthink
Diff: 1 Page Ref: 425
23) Managers spend about ________ percent of their time in formal meetings of five people or more; and up to ________ percent of their time communicating.
A) 10; 50
B) 20; 85
C) 50; 25
D) 50; 50
Diff: 2 Page Ref: 425
24) Which of the following is a simple brainstorming process for nonelectronic meetings?
A) NGT
B) NBT
C) NAT
D) NCT
Diff: 1 Page Ref: 426
25) Communication occurs when the receiver gets the information at a different time than it was sent is called ________ communication.
A) deferred
B) delayed
C) time lagging
D) asynchronous
Diff: 1 Page Ref: 429
26) With ________, group members can work on the same document which is shown on the PC screen of each participant.
A) data conferencing
B) whiteboards
C) instant messaging
D) screen sharing
Diff: 1 Page Ref: 435
27) The spread of instant messaging and Internet telephony has led to the idea of linking people via both voice and audio, which is called ________.
A) audio-video conference
B) instant audio
C) instant video
D) conference
Diff: 1 Page Ref: 435
28) Lotus Notes provides online ________ capabilities through Web conferencing on demand.
A) collaboration
B) cooperation
C) partnership
D) teamwork
Diff: 1 Page Ref: 437
29) Groove Workspace, used with Groove enterprise servers and ________, enables spontaneous, online-offline collaboration that reduces project costs and speeds time-to-market for products and services.
A) blackboards services
B) whiteboards services
C) server services
D) hosted services
Diff: 1 Page Ref: 437
30) The collaborative experience in Live Meeting is enhanced through added features like ________.
A) mood indicators
B) opinion sharing
C) user participation
D) instant messaging
Diff: 2 Page Ref: 439
31) GDSS supports group decision making by providing the automation of ________ using information technology tools.
A) participations
B) tasks
C) processes
D) subprocesses
Diff: 2 Page Ref: 441
32) Which of the following is not an option for deploying GDSS/GSS technology?
A) Multiple users functions
B) Decision room
C) Multiple-use facility
D) Internet based or intranet-based groupware
Diff: 2 Page Ref: 445
33) The term, wiki, refers to the collaborative software that facilitates the operation of a wiki Web site;.and means ________ in the Hawaiian language.
A) slow
B) quick
C) integration
D) collaboration
Diff: 1 Page Ref: 455
34) A wikilogs is an extension of a(n) ________, which is created by an individual or a small group and may have a discussion board.
A) im
B) wiki
C) log
D) blog
Diff: 1 Page Ref: 455
35) Which of the following is used for the members of a supply chain to help improve effectiveness between manufacturing companies?
A) Supply chain hub
B) Collaboration hub
C) Member hub
D) Supplier hub
Diff: 2 Page Ref: 455
36) Which of the following is a gateway to a corporate Web site that enables communication, collaboration, and access to company information?
A) Corporate port
B) Web portal
C) Corporate gateway
D) Enterprise portal
Diff: 1 Page Ref: 456
37) CPFR is an industry-wide project in which suppliers and retailers collaborate in ________ and demand forecasting.
A) planning
B) scheduling
C) purchasing
D) transportation
Diff: 2 Page Ref: 456
38) Retailers make their suppliers responsible for determining when to order and how much to order by adopting ________.
A) VMM
B) SMM
C) SMI
D) VMI
Diff: 2 Page Ref: 458
39) In order for collective intelligence (CI) to happen, four features are needed. Which of the following is not one of those features?
A) acting locally
B) openness
C) peering
D) sharing
Diff: 2 Page Ref: 460
40) Which of the following is a key feature of idea-generating GDSS software?
A) The software does all of the thinking.
B) Bombarding the user with many ideas.
C) Information overload.
D) All of the above.
Diff: 2 Page Ref: 463
41) ________ is a team whose members are in different places while in a meeting.
42) ________ are methods used to increase some of the benefits of meetings and eliminate or reduce some of the losses.
43) ________ that is a qualitative forecasting methodology using anonymous questionnaires.
44) ________ are computerized tools have been developed to provide group support.
45) ________ tools support synchronous communication of graphical and text-based information. These tools are also being used in distance learning, virtual classroom, personnel training, product demonstrations, customer support, e-commerce, and sales applications.
46) In collaborative work, team members are frequently in different locations. By using ________ software, group members can work on the same document, which is shown on the PC screen of each participant.
47) ________, associated with asynchronous mode, allows users to collaborate on projects but work at different times.
48) The advancement of Web-based systems allows ________ where members are in different locations and even in different countries.
49) ________ is the use of electronic communication that allows two or more people at different locations to have a simultaneous conference.
50) The Groove Outliner tool is an open-ended ________ tool that allows shared space members to build structured hierarchical lists of videos and concepts.
51) WebEx Meeting Center integrates data, voice, and video within a standard ________ for real-time meetings over the Internet from any desktop, laptop, or wireless handheld device.
52) A ________ is an interactive computer-based system that facilitates the solution of semistructured and unstructured problems by a group of decision makers.
53) An ________ is a form of GSS that supports anytime/anyplace meetings.
54) A ________ is any combination of hardware and software that enhances groupwork support in decision making, directly or in indirectly.
55) ________ refers to the ability of participants in a group to work simultaneously on a task.
56) ________ is the first major step in the GSS process. This exploratory step looks at the problem and attempts to develop creative ideas about its important features or alternative solutions in a problem-solving session.
57) The success of a GSS depends mostly on its ________.
58) ________ refers to communication systems that transmit voice calls over Internet Protocol—based networks.
59) A ________ is a piece of server software available in a Web site that allows users to freely create and edit Web page content.
60) ________ is an industry-wide project in which suppliers and retailers collaborate in planning and demand forecasting in order to ensure that members of the supply chain will have the right amount of raw materials and finished goods when they need them.
61) Describe the benefits of working in groups.
62) Describe the four cells frameworks of time and space in communications.
63) List and describe the three categories in Groupware products.
64) Describe the major characteristics of a GDSS.
65) List the activities supported by GDSS.
66) Describe the major steps in a standard GSS.
67) Describe the steps that managers must do in creating a work environment that supports collaboration.
68) List the benefits of VoIP for business users.
69) List the benefits of VoIP for individual users.
70) Describe the steps in the process model for implementing a CPFR project.
Chapter 11 Knowledge Management
1) The goal of knowledge management is to identify, capture, store, maintain, and deliver useful knowledge in a meaningful form to anyone who needs it, anyplace and anytime, within an organization.
Diff: 2 Page Ref: 471
2) Knowledge management is about building personal repositories of information at the department and organization levels.
Diff: 2 Page Ref: 471
3) Since knowledge management (KM) first appeared in the mid-1990s, almost all organizations have invested in KM systems and reaped significant benefits.
Diff: 2 Page Ref: 472
4) MITRE implemented KM systems because its knowledge was not structured in a way that encouraged knowledge sharing, and the sharing that was done took place in an unsystematic, informal way.
Diff: 2 Page Ref: 474
5) KM systems are used to leverage a company's intellectual assets, or intellectual capital—the valuable knowledge of its employees.
Diff: 1 Page Ref: 474
6) Knowledge is an important asset, but large companies have difficulties sharing it.
Diff: 1 Page Ref: 474
7) Both the idea of knowledge management and the application of information technology to facilitate the creation, storage, transfer, and application of previously uncodifiable organizational knowledge is a new and major initiative in organizations.
Diff: 3 Page Ref: 474
8) Knowledge management is the systematic and active managing of ideas, information, and knowledge that reside in an organization's external environment.
Diff: 1 Page Ref: 474
9) An up-to-the-minute traffic bulletin along the freeway that indicates a traffic slowdown due to construction several miles ahead is an example of knowledge.
Diff: 1 Page Ref: 475
10) Knowledge has strong experiential and reflective elements that distinguish it from information in a given context.
Diff: 1 Page Ref: 475
11) Today's knowledge may become tomorrow's ignorance if an organization fails to update knowledge as environmental conditions change.
Diff: 1 Page Ref: 476
12) Explicit knowledge deals with objective, rational, and technical knowledge.
Diff: 2 Page Ref: 478
13) Tacit knowledge is usually in the domain of subjective, cognitive, and experiential learning; it is highly personal and difficult to formalize.
Diff: 2 Page Ref: 478
14) The purpose of building a knowledge management system (KMS) is to maintain a well-informed, productive workforce and to help large organizations provide a consistent level of customer service.
Diff: 2 Page Ref: 480
15) A learning organization is one that performs these four main activities well: systematic problem solving, creative experimentation, learning from the best practices of others, and transferring knowledge quickly and efficiently throughout the organization.
Diff: 2 Page Ref: 481
16) Organizational learning and memory depend more on technology than on the people issues.
Diff: 2 Page Ref: 482
17) Use of strong hierarchy, position-based status, and formal power contribute to people wanting to share knowledge.
Diff: 2 Page Ref: 483
18) In contrast to the process approach, the practice approach to knowledge management assumes that a great deal of organizational knowledge is tacit in nature and that formal controls, processes, and technologies are not suitable for transmitting this type of understanding.
Diff: 1 Page Ref: 488
19) eXtensible Markup Language (XML) enables standardized representations of data structures so that data can be processed by different systems without additional programming.
Diff: 1 Page Ref: 497
20) The situation at Mrs. Fields illustrates that while organizations can achieve significant short-term gains through KMS, they must not neglect the creative process of new knowledge creation or they may find themselves applying yesterday's solutions to tomorrow's problems.
Diff: 3 Page Ref: 520
21) What is an organization's valuable knowledge of its employees?
A) Effective and efficient problem solving
B) corporate information
C) intellectual capital
D) active management
Diff: 2 Page Ref: 474
22) Which of the following is true about knowledge management?
A) Successful managers have always been performing knowledge management.
B) KM focuses on identifying and explicating knowledge so that it can be shared in a formal manner.
C) The benefits are always clear at the start of the effort.
D) All of the above.
Diff: 2 Page Ref: 475
23) Knowledge is:
A) dynamic.
B) contextual.
C) information in action.
D) all of the above.
Diff: 1 Page Ref: 475
24) Which of the following is a characteristic of knowledge?
A) Knowledge is subject to diminishing returns
B) Knowledge branches and fragments
C) It is easy to estimate the impact of investments in knowledge
D) All of the above
Diff: 2 Page Ref: 476
25) Tacit knowledge is:
A) easy to explain.
B) easy to apply.
C) easy to document.
D) none of the above.
Diff: 2 Page Ref: 478
26) Explicit knowledge is:
A) easy to explain.
B) easy to apply.
C) easy to document.
D) easy to explain, document and apply.
Diff: 2 Page Ref: 478
27) Firms adopt knowledge management systems:
A) to help deal with employee turnover.
B) to increase productivity.
C) to improve customer service.
D) all of the above.
Diff: 2 Page Ref: 480
28) Which of the following is not a learning skill?
A) Openness to new perspectives
B) Awareness of personal biases
C) Exposure to unfiltered data
D) A sense of urgency
Diff: 2 Page Ref: 482
29) Organizational learning and memory depend ________ on technology and ________ on people issues.
A) less; more
B) mostly; not
C) first; secondly
D) primarily; less
Diff: 2 Page Ref: 482
30) All of the following describe the practice approach to knowledge management except:
A) It deals mostly with tacit knowledge.
B) It provides an environment to generate and transfer high-value tacit knowledge.
C) It uses formal controls and procedures with an emphasis on technology to transfer and disseminate knowledge.
D) It relies on informal social groups.
Diff: 2 Page Ref: 487
31) A knowledge management portal (KMP) consists of each of the following except:
A) knowledge portal
B) corporate culture
C) knowledge repository
D) information data sources
Diff: 1 Page Ref: 492
32) Artificial intelligence (AI) supports knowledge management in each of the following ways except:
A) By enhancing knowledge searches
B) By helping to determine the relative importance of the knowledge
C) By manipulating current results
D) By identifying patterns in data
Diff: 2 Page Ref: 496
33) Which of the following is true about a chief knowledge officer?
A) A CKO need not have extensive experience in KMS.
B) A CKO should be technically savvy.
C) A CKO does not have to be actually involved in promoting knowledge sharing.
Diff: 2 Page Ref: 504
34) What is the importance of communities of practice (COP)?
A) They consist of chief officers of the organization.
B) They are a supportive culture needed for a KMS to succeed.
C) They provide necessary technology training.
D) All of the above.
Diff: 2 Page Ref: 506
35) Each of the following is a way to encourage vibrant COP (communities of practice) in an organization except:
A) manage strictly
B) focus on value
C) combine familiarity and excitement
D) invite different levels of participation
Diff: 2 Page Ref: 508
36) Which of the following is not one of the key knowledge performance dimensions that drives competitive advantage?
A) creating a corporate knowledge-driven culture
B) fostering innovation
C) providing customer service
D) facilitating organizational learning
Diff: 2 Page Ref: 510
37) There are several essential "preconditions" for effective knowledge management to succeed. Which of the following is a precondition?
A) a knowledge infrastructure consisting of technology, structure, and culture
B) a knowledge process architecture of acquisition, conversion, application, and protection
C) economies of scale in obtaining information from external providers
D) A and B
Diff: 3 Page Ref: 510
38) Lessons learned from the British Broadcasting Corporation's (BBC) knowledge management system includes all of the following except:
A) High-tech and large budgets are necessary to attain knowledge management success.
B) The BBC runs on knowledge.
C) Design the system to match the way the company functions, e.g., as a social network.
D) Blogs and wikis have helped break down silos and spread knowledge.
Diff: 3 Page Ref: 511
39) ________ are interactive computerized systems that help employees find and connect with colleagues who have the expertise required for specific problems in order to solve specific, critical business problems in seconds.
A) Expert location systems
B) Tacit knowledge systems
C) Knowledge sharing systems
D) Social networks
Diff: 2 Page Ref: 512
40) Which of the following factors is not among the most important for KM success?
A) Quantity the expected and realized ROI of the KM before and after deployment.
B) Build the right team for knowledge capture and creation.
C) If the deployment appears to be falling behind schedule, it is better to focus on finishing it on schedule rather than narrowing the scope of the knowledge base.
D) Maintain a flexible approach to information access to improve user adoption.
Diff: 2 Page Ref: 513
41) ________ is the systematic and active managing of ideas, information, and knowledge residing in an organization's employees.
42) A learning organization must have an organizational memory and a means to save, represent, and ________ its organizational knowledge.
43) Knowledge evolves over time with ________, which puts connections among new situations and events in context.
44) ________ are information technologies that together make knowledge management available throughout an organization.
45) ________ refers to an organization's capability of learning from its past experience.
46) The ability of an organization to learn, develop memory, and share knowledge is dependent on its ________, which is a pattern of shared basic assumptions.
47) The process approach attempts to ________ organizational knowledge through formalized controls, processes, and technologies.
48) The practice approach to knowledge management assumes that a great deal of organizational knowledge is ________ in nature.
49) ________ are the activities and methods that the most effective organizations use to operate and manage various functions.
50) ________ are software systems that learn how users work and provide assistance in their daily tasks.
51) ________ enables standardized representations of data structures so that data can be processed appropriately by heterogeneous systems without case-by-case programming.
52) Collaboration tools, or ________, were the first tools used to enhance tacit knowledge transfer within an organization.
53) ________ are the doorways into many knowledge management systems. They have evolved from the concepts underlying EIS, GSS, Web browsers, and DBMS.
54) ________ systems allow users to access needed documents, generally via a Web browser over a corporate intranet.
55) A(n) ________ is a group of people in an organization with a common professional interest.
56) ________ are interactive computerized systems that help employees find and connect with colleagues with expertise required for specific problems.
57) In order to measure the financial impact of knowledge management, experts recommend focusing knowledge management projects on specific business problems that can be easily ________.
58) The first step for companies in increasing the probability of success of knowledge management projects is to access whether there is a ________ need for knowledge management.
59) Knowledge management requires a major transformation in organizational ________ to create a desire to share knowledge.
60) Nontrivial ________ methods, such as rewards and recognition, to encourage users to contribute and use knowledge.
61) Define tacit knowledge.
62) Define explicit knowledge.
63) Identify and list reasons why people do not want to share knowledge.
64) Distinguish between a process approach and a practice approach to knowledge management.
65) Describe the knowledge management system cycle steps.
66) Identify ways in which Artificial Intelligence helps knowledge management.
67) Describe electronic document management.
68) Describe the role of the CKO.
69) What is a community of practice?
70) Describe the Seven Principles for designing successful communities of practice.
Chapter 12 Artificial Intelligence and Expert Systems
1) Using the knowledge of many wine experts, MenuVino was able to develop an expert system that mimics the advising that a person would receive from a wine guru.
Diff: 1 Page Ref: 531
2) Most technologies used to support decision situations where expertise is required use qualitative and/or mathematical models to provide the needed support.
Diff: 2 Page Ref: 532
3) Artificial intelligence (AI) has many different definitions and is an area in management science.
Diff: 1 Page Ref: 532
4) Deep Blue is the first computer that demonstrated its intelligence in an area that requires human intelligence.
Diff: 1 Page Ref: 533
5) Artificial intelligent systems have the learning capabilities as humans have.
Diff: 1 Page Ref: 535
6) It is easier to duplicate and disseminate natural intelligence than artificial intelligence.
Diff: 1 Page Ref: 537
7) The basic objective of computer vision is to generate pictures.
Diff: 2 Page Ref: 540
8) The purpose of an intelligent computer-aided instruction (ICAI) is to learn.
Diff: 2 Page Ref: 540
9) Inexact knowledge and imprecise reasoning are important aspects of expertise in applying commonsense to decision-making situations.
Diff: 2 Page Ref: 541
10) Expertise is often acquired from training, reading, and experience in practice, and the level of expertise determines the performance of a decision.
Diff: 1 Page Ref: 543
11) Expert systems (ES) must have the ability to examine their own reasoning and provide proper explanations as to why a particular conclusion was reached.
Diff: 1 Page Ref: 544
12) Expert systems allow knowledge to be transferred more easily at a lower cost.
Diff: 2 Page Ref: 545
13) Acquiring knowledge from experts is often a bottleneck in expert system construction.
Diff: 2 Page Ref: 551
14) The knowledge base of an expert system and the knowledge base of an organization are the same.
Diff: 2 Page Ref: 551
15) The blackboard of an expert system is used for recording intermediate hypotheses and decisions.
Diff: 2 Page Ref: 551
16) The explanation subsystem of an expert system cannot trace responsibility for conclusions to their sources and cannot explain the expert system behavior interactively.
Diff: 2 Page Ref: 552
17) Inference rules, or procedural rules, offer advice on how to solve a problem, given that certain facts are known.
Diff: 2 Page Ref: 557
18) In IF-THEN rules, the IF part indicates the condition for the rule to be activated, and the THEN part shows the action or the conclusion if all IF conditions are satisfied.
Diff: 2 Page Ref: 558
19) The first step in developing an ES is to identify the nature of the problem and to define who is the proper expert responsible for the solving the problem
Diff: 2 Page Ref: 566
20) By implementing ES and other intelligent systems as knowledge servers, it becomes economically feasible and profitable to publish expertise on the Web.
Diff: 2 Page Ref: 572
21) One does not have to rethink completely what to do every time a similar problem is encountered, when using ________.
A) symbolic database
B) knowledge base
C) algorithms
D) rules of thumb
Diff: 2 Page Ref: 535
22) Which of the following technology allows computer users the ability to communicate with a computer in their native language?
A) NAP
B) NLP
C) NBP
D) XML
Diff: 1 Page Ref: 537
23) Which of the following is an electromechanical device that can be programmed to perform manual tasks?
A) Robot
B) Sensory systems
C) Tactile systems
D) Signal processing systems
Diff: 1 Page Ref: 539
24) In the traditional Boolean logic, a person's credit score is either good or bad. In ________, the credit record may be assessed as both good and bad, but with different degrees.
A) genetic algorithms
B) artificial intelligence
C) language translation
D) fuzzy logic
Diff: 2 Page Ref: 541
25) The solution of genetic algorithms is represented as a ________ for a specific problem.
A) cell
B) gene
C) DNA
D) chromosome
Diff: 2 Page Ref: 541
26) The basic rationale of artificial intelligence is to use ________ rather than mathematical calculation.
A) mathematical calculation
B) symbolic reasoning
C) genetic algorithms
D) fuzzy logic
Diff: 2 Page Ref: 543
27) A rule-based expert system contains rules in its knowledge base and the rules are used to generate ________ for the user.
A) questions
B) solutions
C) questions and solutions
D) none of the above
Diff: 2 Page Ref: 545
28) Which of the following is the major objective of an expert system?
A) To learn
B) To teach
C) To provide advice
D) To function as a knowledge repository
Diff: 2 Page Ref: 550
29) Which of the following is used by a nonexpert to obtain expert knowledge and advice?
A) Query environment
B) Development environment
C) consultation environment
D) Blackboard
Diff: 3 Page Ref: 550
30) Which of the following components appear in virtually every expert system?
A) User interface
B) Database management system
C) Statistical analysis module
D) Numeric data representation
Diff: 2 Page Ref: 550
31) Which of the following is usually included in an expert system that interacts with users?
A) Blackboard
B) Justifier
C) Knowledge acquisition subsystem
D) All of the above
Diff: 2 Page Ref: 550
32) The knowledge base in expert system is composed of:
A) facts
B) heuristics and meta-rules
C) facts, heuristics, and meta-rules
D) facts, data, and knowledge rules
Diff: 2 Page Ref: 551
33) Which of the following is the brain of an expert system?
A) Knowledge base
B) Inference engine
C) User interface
D) Blackboard
Diff: 2 Page Ref: 551
34) Which of the following is not a typical type of problems recorded on blackboard?
A) Plan
B) Agenda
C) Solution
D) Key
Diff: 2 Page Ref: 552
35) A knowledge engineer helps the expert structure the problem area by doing all of the following tasks except:
A) decoding the heuristics
B) interpreting and integrating human answers to questions
C) drawing analogies
D) posing counterexamples
Diff: 2 Page Ref: 551
36) A major goal of ________ is to help experts articulate how they do what they do and to document this knowledge in a reusable form.
A) heuristics
B) knowledge engineering
C) knowledge refinement
D) rule interpreting
Diff: 2 Page Ref: 553
37) Which of the following is not an advantage of using multiple experts in the development of an ES?
A) groupthink
B) fewer mistakes
C) enhanced quality
D) wider domain
Diff: 2 Page Ref: 556
38) "If the stop light is red AND you have stopped, THEN a right turn is okay" is an example of:
A) a heuristic
B) a knowledge base
C) an inference rule
D) a production rule
Diff: 2 Page Ref: 557
39) The standard statistical methods are based on the assumption that an uncertainty is the ________ that an event is true or false, whereas certainty theory is based on the ________ that an event is true or false.
A) estimated probability; calculated probability
B) probability; degrees of belief
C) calculated probability; estimated probability
D) degrees of belief; probability
Diff: 2 Page Ref: 561
40) All of the following are benefits of ES except:
A) Reduced downtime
B) Capture of scarce expertise
C) Work well within wide domains of knowledge.
D) Elimination of the need for expensive equipment
41) ________ is a test designed to measure the intelligence of a computer.
42) ________ are intuitive knowledge, or rules of thumb, learned from experience.
43) An ________ is a system that uses human knowledge captured in a computer to solve problems that ordinarily require human expertise.
44) ________ is the recognition and understanding of spoken language by a computer.
45) Sensory systems, such as vision systems, tactile systems, and signal-processing systems, when combined with AI, define a broad category of systems generally called ________.
46) ________ systems bring the power of a computer to bear on the educational process.
47) A(n) ________ network is a set of mathematical models that simulate the way a human brain functions.
48) ________ is a technique for processing linguistic terms, which extends the notions of logic beyond simple true/false statements.
49) ________ are small programs that reside on computers to conduct certain tasks automatically and it runs in the background, monitors the environment, and reacts to certain trigger conditions.
50) A(n) ________ is a person who has the special knowledge, judgment, experience, and methods, and the ability to apply these talents to give advice and solve problems.
51) The ________ is the foundation of an expert system, which includes the relevant knowledge necessary for understanding, formulating, and solving problems.
52) The process of eliciting knowledge is called ________.
53) The ________ of an expert system is the rule interpreter.
54) ________ is a goal-driven approach in which you start from an expectation of what is going to happen and then seek evidence that supports or contradicts your expectation.
55) ________ is a data-driven approach that starts from available information or from a basic idea, which is used to try to draw conclusions.
56) ________ express belief in an event, fact, or hypothesis based on the expert's assessment and can be represented by values ranging from 0 to 100.
57) ________ is the process that ensures the resulting knowledge base contains the knowledge exactly the same as that acquired from the expert.
58) In ________ expert systems, knowledge in the knowledge base is represented in IF-THEN rules that combine the condition and the conclusion for handling a specific situation.
59) An ________ is an expert system without the knowledge in the knowledge base.
60) The Web can greatly support the spread of multimedia-based ES. Such systems are called ________ systems.
61) Describe abilities that are signs of intelligence.
62) Describe the characteristics of artificial intelligence.
63) Describe heuristics and give an example. Why do many AI methods use heuristics?
64) Identify the advantages of artificial intelligence over natural intelligence.
65) Identify the advantages of natural intelligence over artificial intelligence.
66) List major applications and disciplines of AI.
67) Describe fuzzy logic. Contrast fuzzy logic with Boolean logic.
68) Describe the capabilities of human experts.
69) Describe the characteristics of expertise.
70) List and describe the generic categories of expert systems.
Chapter 13 Advanced Intelligent Systems
1) Machine-learning techniques enable computers to acquire knowledge (i.e., learn) from data that reflects the historical happenings.
Diff: 1 Page Ref: 582
2) Machines learning overcomes deficiencies of manual knowledge acquisition techniques by automating the learning process.
Diff: 1 Page Ref: 582
3) Unsupervised learning is a process of inducing knowledge from a set of observations.
Diff: 2 Page Ref: 584
4) Inductive learning allows the computer to use historical cases to solve new problems.
Diff: 2 Page Ref: 585
5) Case-based reasoning (CBR) is analogical reasoning that adapts solutions that had been used to solve old problems to solve new problems.
Diff: 2 Page Ref: 585
6) The foundation of case-based reasoning (CBR) is a repository or library of cases called a case base that contains a number of previous cases for decision making.
Diff: 2 Page Ref: 585
7) Genetic algorithms (GA) are a part of global search techniques that are used to find or produce the best solution to a specific problem.
Diff: 2 Page Ref: 593
8) The knapsack problem is a conceptually simple optimization problem that can be solved directly using analytical methods, but it is ideal for illustrating a genetic algorithm approach.
Diff: 2 Page Ref: 597
9) Genetic algorithms can be used to solve business problems such as assembly-line balancing, facility layout, machine and job shop scheduling, creditworthiness determination, and aircraft design.
Diff: 2 Page Ref: 599
10) The thinking behind fuzzy logic is that decision making is not always a matter of crisp logic, e.g., black or white or true or false. It often involves tones of gray and varying degrees of truth.
Diff: 2 Page Ref: 602
11) Fuzzy logic systems can be used in conducting property appraisals since it is necessary to use judgment, experience, and intuition to generate estimates.
Diff: 2 Page Ref: 604
12) STRATASSIST is a fuzzy ES that helps small- to medium-sized firms plan strategically by asking questions in five strategic, competitive areas.
Diff: 2 Page Ref: 605
13) Support vector machines (SVM) have a solid mathematical foundation in statistical learning theory, but are too complex for use in real-world applications.
Diff: 3 Page Ref: 606
14) A hyperplane is a geometric concept commonly used to describe the separation surface between different classes of things within a multidimensional space.
Diff: 2 Page Ref: 606
15) In SVM, kernel trick allows us to construct a decision surface that is 3D in the feature space while it is inherently nonlinear in the original input space.
Diff: 3 Page Ref: 608
16) In the SVM model development process, the main advantage of normalizing or scaling the data is to avoid attributes in greater numeric ranges dominating those in smaller numeric ranges.
Diff: 3 Page Ref: 609
17) An advantage of SVM models is that they tend to take less time to develop compared to other predictive models.
Diff: 3 Page Ref: 613
18) A personal daemon must be able to make decisions on its own and alter its course of behavior when it meets an obstacle and find ways around the impediment.
Diff: 2 Page Ref: 616
19) Interactivity is the most important characteristic of intelligent agents, making them capable of acting on their own or of being empowered.
Diff: 2 Page Ref: 616
20) Development of a fuzzy inference system is a four-step process: fuzzification, inferencing, summation, and defuzzification.
Diff: 2 Page Ref: 623
21) Neural networks identify ________ in the data from which they generate recommended courses of action.
A) patterns
B) outliers
C) movements
D) associations
Diff: 1 Page Ref: 583
22) Machine learning is a family of artificial intelligence technologies that is primarily concerned with:
A) the use of use neural networks to support simple and repetitive decision making.
B) the design and development of algorithms that allow computers to learn based on historical data.
C) identifying outliers and patterns in data sets.
D) simulating creativity to generate courses of action.
Diff: 2 Page Ref: 583
23) Which of the following is not a relevant observation on how learning relates to intelligent systems?
A) Automated learning systems are anchored in a formal bedrock; thus, their implications are well understood.
B) Automated learning systems demonstrate intriguing learning behaviors.
C) Although AI sometimes matches human-level learning capabilities, it is not able to learn as well as humans or in the same way that humans do.
D) A common thread running through most AI approaches to learning is the manipulation of symbols rather than numeric information.
Diff: 3 Page Ref: 583
24) Human learning is a combination of many complicated cognitive processes. Which of the following is not included in human's cognitive processes?
A) Induction
B) Simulation
C) Deduction
D) Analogy
Diff: 2 Page Ref: 583
25) Machine learning is considered a(n) ________ method.
A) trial-and-error
B) optimization
C) simulation
D) artificial intelligence
Diff: 1 Page Ref: 583
26) In supervised learning:
A) only input stimuli are fed into the network.
B) both the inputs and the desired outputs are known.
C) the desired output and the algorithms are known.
D) the network is controlled by the user.
Diff: 2 Page Ref: 584
27) In unsupervised learning:
A) only input stimuli are fed into the network.
B) both the inputs and the desired outputs are known.
C) the desired output and the algorithms are known.
D) the network is controlled by the user.
Diff: 2 Page Ref: 584
28) Which of the following is not a method of machine learning?
A) Genetic algorithms
B) Generic algorithms
C) Neural computing
D) Case-based reasoning
Diff: 1 Page Ref: 584
29) According to the Simplified Taxonomy of Machine Learning, all of the following are types of learning except:
A) Supervised learning
B) Reinforcement learning
C) Unreiforced learning
D) Unsupervised learning
Diff: 2 Page Ref: 584
30) ________ allows the computer to examine historical cases and generate rules that can be used to solve new problems or that can be deployed for automating a decision support process that repeatedly deals with a specific class of problems (e.g., evaluating loan applications).
A) Exploration learning
B) Case-based reasoning
C) Explanation-based learning
D) Inductive learning
Diff: 2 Page Ref: 585
31) The foundation of case-based reasoning is a library of cases called ________.
A) case base
B) data base
C) legacy system
D) reasoning base
Diff: 2 Page Ref: 585
32) Which of the following is not a step in case-based reasoning process?
A) Retrieve
B) Reuse
C) Retain
D) Reserve
Diff: 2 Page Ref: 586
33) Which of the following are special cases that contain rich contents and special features of deep implications?
A) Descriptive cases
B) Foundation cases
C) Special cases
D) Stories cases
Diff: 2 Page Ref: 586
34) Survival of the fittest (natural selection) is used in ________.
A) genetic algorithms
B) fuzzy logic
C) case-based reasoning
D) fuzzy neural networks
Diff: 1 Page Ref: 593
35) A chromosome in a genetic algorithm refers to ________.
A) crossover
B) summation
C) mutation
D) candidate solution
Diff: 2 Page Ref: 593
36) Crossover means choosing a random position in the string and exchanging the segments ________ of this point with another string.
A) to the right
B) to the left
C) to both left and right
D) to either left or right
Diff: 2 Page Ref: 593
37) Which of the following is a limitation of GA?
A) Difficult to determine good variables for a particular problem
B) The results of GA may vary
C) It might reach local optimum
D) All of the above
Diff: 2 Page Ref: 595
38) Which of the following is not an advantage of fuzzy logic?
A) Greater flexibility
B) Faster calculations
C) More options
D) All of the above are advantages
Diff: 1 Page Ref: 602
39) Fuzzy logic in consumer products is sometimes called ________.
A) inferencing
B) defuzzification
C) continuous logic
D) crisp logic
Diff: 1 Page Ref: 604
40) Autonomy implies that an intelligent agent takes initiative and exercises control over its own actions by having each of the following characteristics except:
A) An agent should accept high-level requests indicating what a human wants, and it should be responsible for deciding how and where to satisfy the requests.
B) An agent should be able to dynamically choose which actions to invoke, and in what sequence, in response to the state of its external environment.
C) The agent should obey commands and not be able to modify requests.
D) An agent should sense changes in its environment and decide when to act.
41) Human learning is a combination of many complicated ________ processes.
42) ________ is a process of inducing knowledge from a set of observations whose outcomes are known.
43) ________ is used to discover knowledge from a set of data whose outcomes are unknown.
44) ________ segmentation is one of the unsupervised machine learning methods wherein data is put into several groups based on their similarity.
45) The basic principle of machine learning is that there are data that preserve previous decision experience, and these experience-based records are called ________.
46) ________ allows computers to examine historical cases and generate rules that can be chained to solve new problems.
47) Genetic algorithms are sets of computational procedures that conceptually follow steps inspired by the biological processes of ________.
48) Genetic algorithms demonstrate self-organization and ________ in much the same way that the fittest biological organisms survive and reproduce.
49) Genetic algorithms ________ by producing offspring that are better and better measured by a fitness-to-survive function.
50) A genetic algorithm represents its candidate solutions as strings of genes called ________ and measures their viability with a fitness function.
51) ________ deals with the kind of uncertainty and partial information that is inherently human in nature.
52) Fuzzy sets use a spectrum of possible values called ________.
53) The process in which the input and output are processed by fuzzy logic before entering neural network in fuzzy neural networks is called ________.
54) A(n) ________ is a geometric concept commonly used to describe the separation surface between different classes of things within a multidimensional space.
55) ________ are one of the most popular machine-learning techniques. They belong to the family of generalized linear models and are closely associated with feedforward-type artificial neural networks.
56) In machine learning, the ________ is a method for using a linear classifier algorithm to solve a nonlinear problem
57) An ________ is an autonomous computer program that observes and acts upon an environment and directs its activity toward achieving specific goals.
58) ________is one of the unintended by-products of the information age characterized by huge volumes of information that cross the desks of mangers and decision makers.
59) ________is the degree of autonomy and authority vested in an agent and can be measured by the nature of the interaction between the agent and other entities in the system.
60) ________is the degree to which agents themselves travel through a network. Some agents may be static, either residing on the client machine or initiated at the server.
61) Describe case-based reasoning. What type of leaning is it?
62) Compare rule-based reasoning and case-based reasoning (CBR).
63) Define these three categories of cases--ossified cases, paradigmatic cases, and stories--based on their different characteristics and the different ways of handling them.
64) What are the advantages of using case-based reasoning?
65) Describe the major steps in case-based reasoning process.
66) List and describe the success factors for a case-based reasoning system.
67) What are genetic algorithms?
68) Describe the genetic operators of Genetic Algorithm in reproduction.
69) What is fuzzy logic?
70) Explain or draw the three-step process description for SVM model development.
Chapter 14 Management Support Systems: Emerging Trends and Impacts
1) RFID technology allows Coca-Cola to test and track new drink flavors and local preferences.
Diff: 1 Page Ref: 635
2) Fundamentally, RFID is one example of automatic identification technologies, unlike scanner-based barcodes and magnetic strips.
Diff: 1 Page Ref: 636
3) Active RFID tags have their own power source and can initiate the data transmission process on their own, but need a reader to energize them.
Diff: 2 Page Ref: 636
4) One of the applications of the massive amounts of data that are generated by RFID is in supply-chain management.
Diff: 2 Page Ref: 637
5) RFID technology generates massive amounts of data that can be analyzed to achieve great insights into a company's environment, a major purpose for the very existence of BI and decision support.
Diff: 2 Page Ref: 641
6) Just as RFID generates major data streams for further analysis through BI technologies that can assist in decision making, another massive data source and technologies to make sense of the data are emerging. This type of data mining is called reality mining.
Diff: 2 Page Ref: 641
7) By applying algorithms that reduce the volume of personally identifiable information, reality mining can characterize places according to the activity and movement between them.
Diff: 3 Page Ref: 643
8) Virtual worldsare defined as artificial worlds created by computer systems in which the user has the impression of being immersed.
Diff: 1 Page Ref: 644
9) Advantages of Second Life are that it operates around the clock and a day in Second Life is four hours long.
Diff: 2 Page Ref: 645
10) Virtual worlds are well-developed, interesting tools for businesses and consumers and have gained widespread acceptance.
Diff: 2 Page Ref: 646
11) Web 2.0 is not only changing what is on the Web, but also how it works.
Diff: 1 Page Ref: 649
12) Wikia is an example of a new business model that has emerged from Web 2.0. It s the accumulation of the "power of the crowd," but the potential of such a business model remains limited because of competition.
Diff: 2 Page Ref: 650
13) Virtual communitiestakes place over a computer network and parallel typical physical communities,
such as neighborhoods, clubs, or associations.
Diff: 2 Page Ref: 650
14) Social network analysis (SNA) software is used to identify, represent, analyze, visualize, or simulate network nodes and edges from various types of input data.
Diff: 2 Page Ref: 653
15) Mobile social networkingrefers to social networking where members converse and connect with one another using cell phones or other mobile devices. It is much more popular in Japan, South Korea, and China than it is in the West.
Diff: 1 Page Ref: 653
16) Advertising and sales are the major EC activities in public social networks.
Diff: 1 Page Ref: 655
17) Cloud computing is an important initiative for a BI professional to watch even though concerns have been raised about cloud computing, including loss of control and privacy, legal liabilities, cross-border political issues, and so on.
Diff: 2 Page Ref: 659
18) Management support systems (MSS) are important factors in the information, Web, and knowledge revolution. This revolution is a cultural transformation like the Industrial Revolution, both of which took place slowly and affected every facet of our lives.
Diff: 2 Page Ref: 659
19) Although many jobs may be substantially enriched by MSS, other jobs may become more routine and less satisfying.
Diff: 1 Page Ref: 664
20) Because the government is acquiring personal data to detect suspicious patterns of activity, there is the prospect of improper or illegal use of the data. Many see such gathering of data as a violation of citizens' freedoms and rights.
Diff: 2 Page Ref: 669
21) What is the difference between active and passive RFID tags?
A) Active tags have a battery as their own power source and do not need a reader to energize them like passive tags do.
B) Active tags receive energy from the electromagnetic field created by the reader; and passive tags receive energy from a battery.
C) Active tags are faster and less expensive than passive tags.
D) Passive tags are most frequently found in defense or military systems, and active tags are used more frequently in retail.
Diff: 2 Page Ref: 636
22) The most commonly used data representation for RFID technology is the:
A) Common Product Code (CPC)
B) Universal Product Code (UPC)
C) Electronic Product Code (EPC)
D) Standard Product Code (SPC)
Diff: 2 Page Ref: 637
23) RFID tag data for products consist of the following information except:
A) manufacturer
B) carrier
C) product
D) serial number
Diff: 2 Page Ref: 637
24) Gillette has used RFID to determine whether stores have stocked their shelves with particular items for a particular promotion. They found that in those stores that used RFID to move a product from the backroom to the shelf before a promotion started, sales were ________ than those that did not move the product in a timely manner.
A) 8 percent higher
B) 18 percent higher
C) 28 percent higher
D) 48 percent higher
Diff: 2 Page Ref: 639
25) The success of today's highly volatile perishables supply chains depends on the level and the timeliness of ________.
A) product visibility
B) product data
C) supply chain management
D) RFID
Diff: 2 Page Ref: 640
26) RFID generates major data streams ready for analysis through BI technologies. Another massive data source is emerging, along with the data mining technologies to make sense of the data, which is referred to as ________.
A) triangulation
B) location-enabled services
C) reality mining
D) sensor mining
Diff: 2 Page Ref: 647
27) By analyzing and learning from these large-scale patterns of movement, Sense Networks is now adapting this general technology to help consumers find people with similar interests. This application is called ________.
A) Citysense
B) Macrosense
C) AppleSense
D) Second Life
Diff: 2 Page Ref: 642
28) The intention of ________ is to achieve a feeling of telepresence and participation from a distance.
A) active environments
B) Wikia
C) social networks
D) virtual worlds
Diff: 2 Page Ref: 644
29) Which is not a major advantage of using Second Life for decision support?
A) easy access and low cost
B) pranksters and spam are filtered out
C) experienced and dedicated designer/builders
D) encourages active participation and experiential learning
Diff: 2 Page Ref: 645
30) Although virtual worlds are becoming interesting tools for businesses and consumers, several factors have kept them from gaining widespread acceptance. Which of the following is one of those factors? :
A) Requires downloading of a plug-in
B) Users get addicted
C) Costs are too high
D) Lack of technical staff
Diff: 2 Page Ref: 646
31) One of the most significant differences between Web 2.0 and the traditional Web is the ________ of Web 2.0:
A) enhanced privacy and security protection
B) opportunity to offer decision support capabilities in a novel way
C) greater collaboration among Internet users and other users, content providers, and enterprises
D) All of the above.
Diff: 2 Page Ref: 649
32) A ________ is a social network organized around a common interest, idea, task, or goal; members interact across time, geographic location, and organizational boundaries to develop personal relationships.
A) virtual community
B) Web 2.0
C) wiki
D) trade fair
Diff: 2 Page Ref: 650
33) Categories of interaction in a virtual community include each of the following except:
A) communication
B) information
C) EC element, such as advertisements
D) private community
Diff: 2 Page Ref: 651
34) MySpace and Facebook, Wikipedia and YouTube are examples of ________.
A) Web logs
B) online social networks
C) social network analysis software
D) Live Spaces
Diff: 1 Page Ref: 653
35) A primary reason why Facebook has expanded so rapidly is the ________, which refers to the principle that more users means more value.
A) network effect
B) mobile effect
C) mobile media
D) connection effect
Diff: 2 Page Ref: 654
36) The term cloud computing originates from a reference to the ________ as a cloud and represents an evolution of all of previous shared/centralized computing trends.
A) server
B) client
C) Internet
D) network
Diff: 1 Page Ref: 658
37) MSS can have ________ implications.
A) micro
B) macro
C) both micro and macro
D) none of the above
Diff: 1 Page Ref: 659
38) Which of the following is not an impact of management support systems (MSS) technologies?
A) organizational
B) governmental
C) individual
D) societal
Diff: 2 Page Ref: 659
39) Which of the following is not an impact of automated decision systems (ADS)?
A) Reduction of upper management
B) Empowerment of customers
C) Improved customer service
D) increased productivity
Diff: 2 Page Ref: 661
40) Privacy has long been a(n) ________ issue.
A) legal
B) ethical
C) social
D) all of the above
41) Placing ________ chips on each flavor cartridge and using readers allows Coca-Cola to test new drink flavors and concepts, observe what flavors and combinations customers are choosing, identify regional preferences, and keep track of the amounts they are drinking.
42) On the positive side for RFID, ________ have a longer read range, better accuracy, more complex rewritable information storage, and richer processing capabilities
43) RFID tag data, in its purest form, is a series of ________.
44) RFID-enabled environmental ________ provide insight into the changing environmental conditions experienced by the product and provide the data necessary to determine to what extent those changes affect the quality or safety of the product.
45) By analyzing and learning from these large-scale patterns of movement, it is possible to identify distinct classes of behaviors in specific contexts, called ________.
46) ________ provide new immersive experiences for decision support and replicate many of the features
of physical gatherings.
47) ________ content is a major characteristic of Web 2.0, as is the emergence of social networking.
48) A major objective of Web 2.0 is to enhance creativity, information sharing, and ________.
49) Wikia is working on community-developed Web searches. If they can create a successful one, ________ will have a challenger.
50) A(n) ________ is a group of people with common interests who interact with one another.
51) ________ softwareis used to identify, represent, analyze, visualize, or simulate network nodes and edges from various types of input data, including mathematical models of social networks.
52) Mobile social networking is much ________ popular in Japan, South Korea, and China than it is in the West.
53) ________, which was launched in 2004 by former Harvard student Mark Zuckerberg, is the second-largest social network service in the world.
54) Business-oriented ________, such as LinkedIn and Xing, concentrate on business issues both in one country and around the world; e.g., recruiting, finding business partners).
55) ________ computing offers the possibility of using software, hardware, platform, and infrastructure, all on a service-subscription basis.
56) Automated decision support (ADS) applications can empower ________-level frontline employees, giving them more autonomy.
57) In one view, intelligent systems and other MSS will cause massive ________ because of automating jobs, increased productivity, lower required skill levels, and impacts on all sectors of the economy.
58) Privacy is the right to be left alone and the right to be free from ________ personal intrusions.
59) Serious legal issues may develop with the introduction of intelligent systems; liability and ________ are the dominant problem areas.
60) Many people recognize that MSS tools are effective and efficient means to increase ________ even though the privacy of many innocent people is compromised.
61) Define the components of RFID and how active and passive tags works.
62) How are real-world institutions, such as businesses and government agencies, incorporating virtual worlds into their strategic marketing initiatives?
63) What are four major advantages of using Second Life for decision support?
64) List four major disadvantages of using Second Life for decision support.
65) Describe three representative characteristics of the Web 2.0 environment.
66) Describe social network analysis (SNA) software.
67) What is Twitter and how can it add business value to marketers?
68) Computer technology has already changed our world, and much more change is anticipated. What are some of the major areas of social impact?
69) What are some of the potential positive and negative impacts of MSS on managers' jobs?
70) What is privacy? Why is it difficult to enforce privacy regulations?
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Week 5 DQ 1
"Object-Oriented Software Design for Everything?" Please respond to the following:
· From the e-Activity, take a position on whether or not an object-oriented approach can be used to develop any type of system. Provide two examples that support your position.
· Explain how Unified Modeling Language (UML) diagrams can be linked to and implemented by an object-oriented programming language such as C# or Java. Provide at least three examples to support your response.
Week 5 DQ 2
"Design Patterns" Please respond to the following:
· From the e-Activity, using UML and text, identify a creational design pattern and describe a situation where it could be applied. Provide a justification as to why it should be used over other creational design patterns that are available.
· Using UML and text, identify a behavioral design pattern and describe a situation where it could be applied. Provide a justification as to why it should be used over other behavioral design patterns that are available.
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CIS 513 Week 5 Midterm Exam – Strayer NEW
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Chapter 1 Through 4
Chapter 1 - Introduction to Wireless Communications
TRUE/FALSE
1. VoIP phones can carry analog data over the Internet.
2. WirelessHD can transfer video and sound at 7 Gbps and higher.
3. UWB WiGig has a range of up to 100 meters.
4. The ZigBee Alliance protocols enable devices like light switches to communicate with one another.
5. RFID technology is implemented by roadside assistance services to link a vehicle and driver to a central service center.
6. 4G technology uses 100% analog transmission for voice and data.
7. An AP connects wireless devices to the wired LAN.
8. DSL is an Internet access technology that uses cable TV lines to make a network connection.
9. The job market for wireless LAN professionals is saturated and likely to decline in coming years.
10. One advantage of wireless technology is that it is immune to interference sources.
MULTIPLE CHOICE
1. What type of device is built into a tablet computer and can send data over radio waves to another device such as a laser printer?
a.
VoIP phone
c.
access point
b.
wireless NIC
d.
Ethernet NIC
2. How can VoIP over Wi-Fi help save money?
a.
by eliminating the need for a phone
c.
by reducing the cost of a smartphone
b.
by saving on cellular phone bills
d.
by not requiring an access point
3. Where would you most likely find RFID tags around the house?
a.
on product packages
c.
in the plumbing
b.
in the walls and ceilings
d.
on the electrical lines
4. What is the typical range for the use of Bluetooth?
a.
meters to kilometers
c.
inches to feet
b.
yards to miles
d.
millimeters to inches
5. With what technology will you find radio modules and link managers?
a.
RFID
c.
Wi-Fi
b.
GPS
d.
Bluetooth
6. Which technology has a maximum range of about 10 meters, can transmit up to 10 Gbps, and is used to transmit high quality audio and video wirelessly?
a.
Wi-Fi
c.
UWB
b.
Bluetooth
d.
RFID
7. Automatic connections between what type of devices create a piconet?
a.
VoIP
c.
Bluetooth
b.
Infrared
d.
WirelessHD
8. In what type of wireless communication device will you find a repeater?
a.
satellite
c.
antenna
b.
NFC
d.
WNIC
9. What kind of network is built around the concept of low-power transmitters built on towers that can use the same radio frequency channel?
a.
Wi-Fi 802.11 networks
c.
UWB A/V networks
b.
cellular telephone networks
d.
GPS tracking networks
10. What type of cellular network uses 100 percent digital transmission for voice and data and can reach rates up to 150 Mbps?
a.
CDMA
c.
3G
b.
4G
d.
GSM
11. What kind of device does a WLAN use to facilitate communication between wireless computers?
a.
Ethernet switch
c.
access point
b.
GPS hub
d.
cell station
12. Which wireless standard provides for data transmission speeds up to 600 Mbps with a range up to 375 feet?
a.
802.11g
c.
802.16m
b.
WiGig
d.
802.11n
13. Which technology uses regular phone lines and transmits at speeds up to 256 Kbps?
a.
POTS
c.
T1
b.
ISDN
d.
cable modem
14. Which communication technology should you use if you need to connect three offices which are all within 3 miles of each other at speeds up to 75 Mbps using antennas?
a.
T1
c.
WiMax
b.
DSL
d.
ISDN
15. Where are you most likely to find the WAP2 protocol in use?
a.
cellular phones
c.
tablets
b.
laptops
d.
servers
16. What term refers to the combining of voice, video and text-processing and access to multiple network platforms from a single device?
a.
access aggregation
c.
digital convergence
b.
digital landscape
d.
network transparency
COMPLETION
1. Smartphones can use software that allow them to make ______________ phone calls over a wireless LAN instead of the cellular network.
2. Bluetooth communicates using small, low-power ______________ called radio modules.
3. In the future, most barcode functions are likely to be replaced by ___________ tags including for the purpose of inventory management.
4. To protect confidentiality, wireless data can be ______________ between the access point and wireless device, allowing only the recipient to decode the message.
5. The FCC, FDA, and EPA have established ________ exposure safety guidelines to limit the signal absorption rate of wireless device users.
MATCHING
a.
3G
f.
motes
b.
Bluetooth
g.
T1
c.
DSL
h.
UWB
d.
J2ME
i.
WiGig
e.
link manager
j.
WPAN
1. a wireless standard that enables devices to transmit data at up to 721.2 Kbps
over a typical maximum distance of 33 feet
2. a variation of the Java programming language designed for use in portable devices such as cellular phones
3. a very small network that typically extends to 10 meters or less
4. a technology used to transmit data over special telephone lines at 1.544 Mbps
5. an alliance of companies involved in developing a common wireless specification using the 60 GHz band
6. a technology used to transmit data over a telephone line
7. remote sensors used for collecting data from manufacturing equipment or for
scientific research
8. wireless communications technology that allows devices to transmit data at hundreds of megabits or even gigabits per second at short distances
9. a digital cellular technology that can send data at up to 21 Mbps over the cellular telephone network
10. special software in Bluetooth devices that helps identify other Bluetooth devices
SHORT ANSWER
1. Describe how RFID can enhance a family’s convenience in the kitchen.
2. Describe Bluetooth technology and how it can be used in a computing environment.
3. What is UWB and how might it be used in a home?
4. What is a piconet?
5. What does a repeater do in a satellite communication system?
6. How does a WLAN use an access point?
7. Describe a WMAN and discuss a technology a WMAN might use.
8. What is digital convergence and how might it affect how people use network devices?
9. Discuss the use of wireless technologies in home entertainment.
10. Discuss how radio signal interference can affect wireless devices.
Chapter 2 - Wireless Data Transmission
TRUE/FALSE
1. The ASCII code uses 16 bits to represent 128 different characters.
2. Infrared light interferes with radio signals but is not affected by radio signals.
3. The height of a radio wave is called the amplitude of the wave.
4. Spread-spectrum signals are more susceptible to outside interference than narrow-band transmissions.
5. Hopping codes used in FHSS transmissions are configured on the base station by the network administrator.
MULTIPLE CHOICE
1. Which of the following is true about wireless radio signal transmissions?
a.
they travel at the speed of light
c.
they travel as discrete particles
b.
they require an atmosphere to move
d.
they require visible light
2. Which of the following is NOT true about infrared light?
a.
it can be used in directed transmissions
c.
it is less susceptible to interference from visible light sources
b.
it can be used in diffused transmissions
d.
all infrared signals are invisible
3. Which of the following transmits a signal in an infrared device?
a.
diffuser
c.
detector
b.
emitter
d.
antenna
4. Which of the following is NOT a limitation of using infrared wireless systems?
a.
they lack mobility
c.
someone can eavesdrop from another room
b.
they use a line-of-sight principle
d.
diffused transmissions have a range of 50 feet
5. Which of the following is a good application for an infrared wireless system?
a.
stream movies from a server
c.
whole house wireless network
b.
wireless outdoor speakers
d.
data transfer between laptop and camera
6. Which best describes an analog signal?
a.
it starts and stops
c.
consists of discrete pulses
b.
intensity varies and is continuous
d.
Morse code is an example
7. What process must occur to transmit a digital signal over an analog medium?
a.
modulation
c.
decoding
b.
decoupling
d.
emitting
1
8. The distance between a point in one wave cycle and the same point in the next wave cycle is called which of the following?
a.
amplitude
c.
carrier
b.
wavelength
d.
frequency
9. The frequency of a wave is best defined as which of the following?
a.
encoding of bits onto an analog wave
c.
a carrier wave that has been modulated
b.
the voltage difference between the peak and trough of the wave
d.
the number of times a cycle occurs within one second
10. What is the unit of measurement for radio frequency?
a.
volt
c.
Hz
b.
rpm
d.
amp
3
11. What is the role of an antenna on a wireless device?
a.
it receives data
c.
it serves as a ground signal
b.
it demodulates
d.
it transmits and receives data
12. Which of the following is true about baud rate?
a.
only one bit can be transferred per signal unit (baud)
c.
a baud rate of 2400 always means a bandwidth of 2400 bps
b.
multiple bits can be transferred with each signal unit
d.
multiple signal units are needed to represent each bit
13. Which of the following best describes bandwidth in an analog system?
a.
the range of frequencies that can be transmitted by a system
c.
the number of bytes transmitted per minute
b.
the number of bits transmitted per second
d.
the maximum frequency supported by the medium
14. Which of the following is NOT a type of modulation that can be applied to an analog signal?
a.
phase
c.
frequency
b.
carrier
d.
amplitude
15. Which type of radio signal is most susceptible from interference sources such as lightning?
a.
AM
c.
PM
b.
FM
d.
DM
16. Which of the following is NOT an advantage of digital modulation over analog modulation?
a.
better use of bandwidth
c.
better performance during interference
b.
requires less power
d.
modulation techniques are simpler
17. Which binary signaling technique reduces the voltage to zero during the transmission of a 1 bit before the bit period ends.
a.
NRZ-L
c.
RZ
b.
NRZ-I
d.
NRZ
18. Which binary modulation technique employs NRZ coding such that the absence of a carrier signal represents a 0 bit?
a.
ASK
c.
FSK
b.
BPSK
d.
PSK
19. Which radio transmission method uses a chipping code?
a.
FM
c.
DSSS
b.
FHSS
d.
AM
20. Which of the following is a spread spectrum technique that employs mathematical algorithms to recover lost data bits?
a.
frequency hopping
c.
narrow band
b.
direct sequence
d.
wide band
COMPLETION
1. Data signals in a wireless communication system travel on _______________ waves.
2. A signal that is broadcast as a continuous wave is called a(n) _______________ signal.
3. When representing a wave with a garden hose, the distance between the peaks of the waves represents the ____________.
4. The _______________ non-return-to-zero encoding method represents a 1 bit by increasing voltage to a positive value and a 0 bit by decreasing the voltage to a negative value.
5. In the presence of background interference, receivers can detect a ____________ change more reliably than a frequency or amplitude change.
MATCHING
a.
ASCII
f.
digital modulation
b.
amplitude modulation
g.
frequency modulation
c.
analog signal
h.
hopping code
d.
baud rate
i.
NRZ
e.
carrier signal
j.
PM
1. a method of encoding a digital signal onto an analog carrier wave for transmission over media that does not support direct digital signal transmission
2. the number of times that a carrier signal changes per second
3. a technique that changes the number of wave cycles in response to a change in the amplitude of the input signal
4. a binary signaling technique that increases the voltage to represent a 1 bit but provides no voltage for a 0 bit
5. a technique that changes the height of a carrier wave in response to a change in the height of the input signal
6. a signal of a particular frequency that is modulated to contain either analog or digital data
7. a technique that changes the starting point of a wave cycle in response to a change in the amplitude of the input signal
8. the sequence of changing frequencies used in FHSS
9. a coding scheme that uses the numbers from 0 to 127 to represent alphanumeric characters and symbols
10. a signal in which the intensity (amplitude or voltage) varies continuously and smoothly over a period of time
SHORT ANSWER
1. Describe the components in an infrared wireless system.
2. What are the advantages and limitations of an infrared wireless system?
3. Contrast analog signals with digital signals.
4. Describe how radio transmitters use a carrier signal.
5. How are radio waves transmitted using an antenna?
6. What are the three types of modulation that can be applied to an analog signal to enable it to carry information?
7. Describe amplitude modulation.
8. Describe the NRZ technique of representing bit signals.
9. What is phase shift keying? Describe how it works.
10. How are bits transmitted using DSSS? Include the chipping code in your answer.
Chapter 3 - Radio Frequency Communications
TRUE/FALSE
1. A high-pass filter allows all signals above a minimum threshold to pass through.
2. A mixer separates an input into two or more outputs.
3. TDMA was developed to overcome the problem of crosstalk.
4. A disadvantage of CDMA is that it can only carry one third the amount of data of TDMA.
5. There are no power limits imposed on devices using the unregulated bands.
MULTIPLE CHOICE
1. Which of the following is NOT a common component of all radio systems?
a.
filter
c.
mixer
b.
emitter
d.
antenna
2. Which of the following is a type of RF filter?
a.
top-pass
c.
bandpass
b.
mid-pass
d.
medipass
3. If a low-pass filter is set at 2200 MHz, which of the following signals would be allowed to pass through?
a.
2400 MHz
c.
1000 MHz
b.
1500 GHz
d.
23000 KHz
4. What kind of signals can result from the process of modulating a signal with data to be transmitted?
a.
harmonics
c.
modulators
b.
passbands
d.
sidebands
5. The sidebands of a frequency carrier are best described as which of the following?
a.
the sum of the carrier signal and the highest value of the mixer output
c.
the average of the high and low values of the input signal
b.
the difference between the highest and lowest input frequency
d.
the sum and difference of the highest input signal and carrier frequency
6. Which type of device is considered active device because it adds power to a signal?
a.
mixer
c.
antenna
b.
filter
d.
amplifier
7. Which of the following would take a transmission band of 1000 Hz and divide it into 100 channels of 10 Hz each to accommodate multiple access?
a.
FDMA
c.
CDMA
b.
TDMA
d.
SDMA
8. Which multiple access method overcomes the problem of crosstalk and divides the transmission time into several slots?
a.
SDMA
c.
TDMA
b.
CDMA
d.
FDMA
9. Which multiple access method uses a spreading code?
a.
CDMA
c.
SDMA
b.
TDMA
d.
FDMA
10. What type of transmission is a broadcast radio station an example of?
a.
duplex
c.
simplex
b.
half-simplex
d.
half-duplex
11. Which type of switching is used in a POTS system?
a.
packet switching
c.
cellular switching
b.
circuit switching
d.
frame switching
12. What can take place when signal strength falls close to or below the level of noise?
a.
SNR
c.
crosstalk
b.
interference
d.
attenuation
13. Objects in the path of a radio signal can cause which of the following?
a.
crosstalk
c.
EMI
b.
amplification
d.
attenuation
14. What is the term for signals that get reflected and travel different paths between transmitter and receiver arrive out of phase?
a.
electro-magnetic interference
c.
multipath distortion
b.
reflective attenuation
d.
phase misalignment
15. What problem can a directional antenna reduce in severity?
a.
reflective attenuation
c.
phase misalignment
b.
multipath distortion
d.
electro-magnetic interference
16. Which type of standard is an official standard controlled by and organization or body open to everyone?
a.
de jure standards
c.
consortia standards
b.
de facto standards
d.
paramount standards
17. Which standards organization functions as a clearinghouse for many types of standards development in the U.S.?
a.
ETSI
c.
ANSI
b.
IETF
d.
ISOC
18. Which standards body deals with user-premises equipment and satellite communications?
a.
IAB
c.
IETF
b.
TIA
d.
ISCO
19. Which international standards organization coordinates global communications networks and services and is actually a treaty organization?
a.
IAB
c.
ISO
b.
TIA
d.
ITU
20. In which frequency band will you find an 802.11 network?
a.
medium frequency (MF)
c.
extremely high frequency (EHF)
b.
super high frequency (SHF)
d.
very high frequency (VHF)
COMPLETION
1. A __________________ filter sets a range of frequencies that include a minimum and maximum threshold.
2. _________________ uses direct sequence spread spectrum technology.
3. ____________________ transmission is typically used in consumer devices such as CB radios or walkie talkies where you have to hold down a button while speaking.
4. A technique called ______________ array processing replaces a traditional antenna
5. _______________ transmission uses low-power, precisely timed pulses of energy that operate in the same frequency spectrum as low-end noise and is used in WiGig.
MATCHING
a.
circuit switching
f.
license exempt spectrum
b.
directional antenna
g.
packet switching
c.
full-duplex transmission
h.
signal-to-noise ratio
d.
half-duplex transmission
i.
simplex transmission
e.
harmonics
j.
switching
1. transmission that occurs in both directions but only one way at a time
2. a switching technique in which a dedicated and direct physical connection is made between two transmitting devices
3. transmission that occurs in only one direction
4. unregulated radio frequency bands that are available in the United States to any users without a license
5. transmissions in which data flows in either direction simultaneously
6. moving a signal from one wire or frequency to another
7. data transmission that is broken into smaller units
8. an antenna that radiates the electromagnetic waves in one direction only
9. stray oscillations that result from the process of modulating a wave and that
fall outside the range of frequencies used for transmission
10. the measure of signal strength relative to the background noise
SHORT ANSWER
1. What does a filter do and why is one needed in a radio system?
2. List the three types of RF filters.
3. Why are filters found in transmitters?
4. What is the purpose of a mixer? Include a discussion of sidebands in your answer.
5. What is an amplifier and why is it a crucial component in a radio system?
6. Describe time division multiple access.
7. What are two advantages that TDMA has over FDMA?
8. What are three advantages of CDMA over TDMA?
9. What advantages does packet switching have over circuit switching for transmitting data?
10. What is multipath distortion?
Chapter 4 - How Antennas Work
TRUE/FALSE
1. Cables and connectors offer resistance to the flow of electricity, increasing the power of a signal.
2. Decibels are an absolute measurement of signal strength, making it simpler to calculate gain or loss.
3. The size of an antenna is directly proportional to the wavelength of the signal it is designed to transmit and receive.
4. A monopole antenna is a type of two-dimensional antenna.
5. Point-to-point wireless links are best served by using omnidirectional antennas.
MULTIPLE CHOICE
1. Which of the following is likely to result in a wireless signal gain?
a.
cables
c.
connectors
b.
amplifier
d.
atmosphere
2. What unit of measurement is a ratio between two signal levels?
a.
volt
c.
decibel
b.
watt
d.
ohm
3. Which value indicates the signal being measured is twice the power?
a.
+3 dB
c.
+5 mW
b.
-5 dB
d.
-3 mW
4. If a signal is represented as 15 mW + 10 db, what is the resulting signal strength in mW?
a.
30 mW
c.
75 mW
b.
25 mW
d.
150 mW
5. Which of the following refers to the gain an antenna has over a dipole antenna at the same frequency?
a.
dBm
c.
dBi
b.
dBd
d.
dBg
6. Which of the following is true about antennas?
a.
the size is proportional to the wavelength
c.
most are active devices
b.
lower frequency signals require larger antennas
d.
omnidirectional types provide the best directional gain
7. Which of the following is true about omnidirectional antennas?
a.
they work best in point-to-point links
c.
longer ones usually have higher gain
b.
they cannot be used in 802.11 applications
d.
they emit a signal in three dimensions
8. Which type of directional antenna is used for outdoor applications up to 16 miles?
a.
cellular
c.
parabolic dish
b.
patch
d.
yagi
9. A cellular phone antenna that is 13 inches long would be considered which of the following?
a.
eighth-wave
c.
half-wave
b.
quarter-wave
d.
full-wave
10. If an antenna is much longer than the wavelength, what is the typical result?
a.
inefficient delivery of RF energy
c.
wrong signal frequency
b.
signals that are an incorrect wavelength
d.
no signal is transmitted
11. What does antenna polarization determine about the performance of the antenna?
a.
radiation pattern
c.
measurement of signals is positive or negative voltage
b.
horizontal or vertical orientation
d.
direction of the signal
12. What type of antenna is a straight piece of wire with no reflecting ground element?
a.
monopole
c.
horn
b.
dipole
d.
dish
13. Which type of antenna is two-dimensional, is common in telephone networks, and is used to transmit high-power microwave signals between towers?
a.
patch
c.
horn
b.
satellite dish
d.
dipole
14. What type of antenna is divided into a matrix of radiating elements and are used in modern radar systems?
a.
switched beam
c.
patch
b.
horn
d.
phased array
15. When a coaxial cable connects the antenna to the transmitter, what property of the cable must match that of the antenna?
a.
impedance
c.
length
b.
thickness
d.
inductance
16. What type of wave propagation do RF signals transmitted at 50 MHz have?
a.
ground waves
c.
line-of-sight waves
b.
sky waves
d.
atmospheric waves
17. Which type of antenna should usually be used at the central location in a point-to-multipoint wireless link?
a.
unidirectional
c.
directional
b.
omnidirectional
d.
semi-directional
18. Which of the following is the elliptical region within which signals travel between two antennas in a point-to-point link?
a.
troposphere radius
c.
Fresnel zone
b.
propagation limit
d.
wave pattern
19. What is the signal strength necessary to meet a receiver’s minimum requirements?
a.
transmission path
c.
minimum wavelength
b.
Fresnel zone
d.
link budget
20. What is the maximum percent of the Fresnel zone that can be blocked by obstructions in a point-to-point link?
a.
20%
c.
40%
b.
60%
d.
10%
COMPLETION
1. ______________ is the effect of an amplifier boosting the power of a signal.
2. A radio signal’s power does not change in a linear fashion, but instead changes ______________.
3. _____________ is a relative measurement used to represent gain or loss in a signal.
4. When considering antenna size, lower frequencies require ___________ antennas.
5. A _________________ analyzer is a tool that displays the signal amplitude and frequency of a radio transmission.
MATCHING
a.
antenna pattern
f.
ground-plane
b.
dB isotropic
g.
isotropic radiator
c.
dBm
h.
passive antenna
d.
dipole
i.
patch antenna
e.
free space loss
j.
smart antenna
1. the signal loss that occurs as a result of the tendency of RF waves to spread
2. a theoretically perfect sphere that radiates power equally in all directions
3. the relative measurement of the gain of an antenna when compared to a theoretical isotropic radiator
4. a new type of antenna that uses a signal processor and an array of narrow beam elements
5. a graphic that shows how a signal radiates out of an antenna
6. a semi-directional antenna that emits a wide horizontal beam and an even
wider vertical beam
7. a metal disc or two straight wires assembled at 90 degrees, used to provide
a reflection point for monopole antennas
8. a relative way to indicate an absolute power level in the linear watt scale
9. can only radiate a signal with the same amount of energy that appears at the antenna connector
10. an antenna that has a fixed amount of gain over that of an isotropic radiator
SHORT ANSWER
1. List three of the four aspects of RF signal transmission you need to know.
2. Describe the “tens and threes of RF mathematics”.
3. What is an isotropic radiator?
4. Describe directional gain and how it can be accomplished with a passive antenna.
5. What are two types of directional antenna? Describe them.
6. What is free space loss? Describe how it occurs.
7. How does the size of an antenna affect its ability to transmit and receive?
8. What does an antenna pattern show about the RF wave?
9. What does antenna polarization tell you about the antenna wave? How is it important for signal reception?
10. Give two examples of two-dimensional antennas. Describe them.
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CIS 512 Week 5 Discussion Question – Strayer New
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Week 5 Discussion
"Disks and Printers" Please respond to the following:
• From the first e-Activity, identify the specific manufacture and model of one (1) magnetic disk, one (1) solid state drive, and one (1) optical drive. Evaluate the quality of each in terms of read and write speeds, access methods, storage capacity, longevity, and price. Recommend the device that would be the best suited for a home environment and the device that would be best suited for a business environment. Provide a rationale for your response.
• From the second e-Activity, identify the make and model of one (1) laser printer and one (1) inkjet printer that are similarly priced. Evaluate the quality of each in terms of print speed (i.e., pages per minute), resolution (i.e., dots per inch), memory, color capability, duplex printing capability, cartridge price, cartridge printing capacity, and longevity. Next, recommend the printer that would be the best suited for a home environment and the printer that would be the best suited for a business environment. Provide a rationale for your response.
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CIS 505 Week 5 Discussion Questions - Strayer
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Week 5 DQ 1
Routing and Switching Selection Criteria. Please respond to the following:
• Compare and contrast distance-vector and link state routing, and analyze the limitations that would prevent the usage of each.
• Choose the method best suited for designing a new routing protocol for a LAN architecture. Justify your decision.
Week 5 DQ 2
Transmission Medium. Please respond to the following:
• Suggest a way to improve the way LLC and MAC are used for LAN operation.
• Evaluate guided and unguided transmission medium to determine which you would use to design a new facility.
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CIS 505 Assignment 3: Elastic and Inelastic Traffic - Strayer
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Due Week 5 and worth 60 points
Write a three to four (3-4) page paper in which you:
1. Outline a plan for the development of an addressing and naming model in an environment of the following scenario:
a. Ten (10) departments in a 1,000-employee organization
b. Equal separation by geography
c. Use a common data center of twenty (20) backend enterprise servers
2. Analyze the functional problems of throughput, delay, and packet loss as it pertains to your plan.
3. Analyze and explain how you would use DNS in your plan.
4. Compose a two-paragraph executive summary highlighting the main points of your plan.
5. Use at least three (3) quality resources in this assignment. Note: Wikipedia and similar Websites do not qualify as quality resources.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; references must follow APA or school-specific format. Check with your professor for any additional instructions.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length.
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CIS 501 Midterm and Final Exam – Strayer NEW
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Chapters 1 Through 18
Chapter 1
Introduction to Decision Support Systems
True-False Questions
1.
The role of a DSS is to provide support to the decision-maker during the process of making a decision.
Difficulty: Easy Reference: p. 3
2.
A DSS is used only for unstructured decisions.
Difficulty: Easy Reference: p. 3
3.
The purpose of a DSS is to replace the decision maker.
Difficulty: Easy Reference: p. 4
4.
The DSS should always be under the ultimate control of the user.
Difficulty: Easy Reference: p. 3
5.
A DSS facilitates learning on the part of the decision maker.
Difficulty: Easy Reference: p. 3
6.
The most powerful classification of DSSs is the Universal DSS.
Difficulty: Medium Reference: p. 6
7.
A DSS is normally designed to be wide in its scope of application.
Difficulty: Medium Reference: p. 6
8.
A highly unstructured decision is one where the objectives of the situation are often conflicting, the alternatives available to the decision maker are difficult to isolate or determine, and the effect of a particular course of action or selection of an alternative carries with it a high degree of uncertainty.
Difficulty: Medium Reference: p. 7
9.
The user interface of a DSS performs activities related to problem recognition and generation of interim or final solutions.
Difficulty: Hard Reference: p. 9
10.
The data management component of a DSS is where the activities associated with the retrieval, storage and organization of the relevant data for the particular decision context are managed.
Difficulty: Hard Reference: p. 9
11.
The data management component of a DSS is responsible for maintaining the logical independence of the data.
Difficulty: Hard Reference: p. 12
12.
The model library stores and manages all solver algorithms within a DSS.
Difficulty: Medium Reference: p. 15
13.
Model acquisition is the process by which new information is derived from a combination of existing or previously derived information.
Difficulty: Medium Reference: p. 16
14.
Rules, heuristics and constraints are stored within a knowledge base of a DSS.
Difficulty: Medium Reference: p. 16
15.
A model is a simplification of some event or process constructed for the purpose of studying the phenomenon and thus developing a better understanding of it.
Difficulty: Medium Reference: p. 13
16.
Internal data normally comes from an organization’s transaction processing systems as a normal course of conducting the daily affairs of the organization.
Difficulty: Easy Reference: p. 11
17.
Knowledge engineers are specially trained to interact with domain experts for the purposes of acquiring all of the knowledge the expert has in a particular domain and all of the relationships among that knowledge.
Difficulty: Medium Reference: p. 18
18.
The model base contains the various statistical, financial, mathematical, and other quantitative models used in performing the variety of analytical capabilities in a DSS.
Difficulty: Medium Reference: p. 14
19.
Silver proposed a method of DSS classification based upon the attributes of the problem-solving context.
Difficulty: Hard Reference: p. 25
20.
Hypertext systems are useful for knowledge bases that are document based.
Difficulty: Medium Reference: p. 27
Multiple Choice Questions
21.
The realization of the benefits to be derived from using a DSS is dependent upon which of the following?
a. The decision maker
b. The context of the decision
c. The design of the DSS
d. All of the above.
Difficulty: Easy Reference: p. 4
22.
Which of the following contributed to the development of the concept of decision support systems?
a. J.P. Little
b. Gorry
c. Scott Morton
d. All of the above.
Difficulty: Easy Reference: p. 6
23.
Limitations of a DSS include which of the following?
a. They cannot be designed to copy human imagination.
b. The language interface does not yet allow for natural language processing.
c. They are designed to be narrow in scope.
d. All of the above
Difficulty: Easy Reference: p. 5
24.
Strategic planning refers to which of the following activities?
a. Where decisions related to the effective and efficient procurement and deployment of the organizations assets are made.
b. Where decisions related to the objectives of the organization are made.
c. Where decisions relating to the day-to-day tasks and activities of the organization are made.
d. All of the above.
Difficulty: Medium Reference: p. 7
25.
Management control refers to which of the following activities?
a. Where decisions related to the objectives of the organization are made.
b. Where decisions related to the effective and efficient procurement and deployment of the organization’s assets are made.
c. Where decisions relating to the day-to-day task and activities of the organization are made.
d. None of the above.
Difficulty: Medium Reference: p. 7
26.
Operational control is best associated with which of the following activities?
a. Making decisions related to the objectives of the organization.
b. Making decisions related to the effective and efficient procurement and deployment of the organizations assets.
c. Making decisions relating to the day-to-day tasks and activities of the organization.
d. Both b and c.
Difficulty: Medium Reference: p. 7
27.
The components of a DSS can be classified into which of the following?
a. Data management system, data repository, knowledge engine, model repository, user(s)
b. Data query facility, model management system, model execution processor, user interface, user(s)
c. Data management system, model management system, knowledge engine, user interface, user(s)
d. Data management system, model management system, knowledge engine, internal data, external data
Difficulty: Medium Reference: p. 9
28.
Which of the following is considered a subsystem within the data management system?
a. Database(s)
b. Database management system
c. The data query facility
d. All of the above.
Difficulty: Easy Reference: p. 12
29.
One of the most important characteristics of a model is that:
a. it is easy to construct.
b. it is commonly found in decision-making environments.
c. it is a simplified form of reality.
d. None of the above.
Difficulty: Easy Reference: p. 13
30.
The two primary responsibilities of the MBMS are:
a. execution and integration of the models available to the DSS and the modeling of user preferences.
b. execution and integration of the data available to the DSS and the manipulation of the user interface.
c. execution of the user interface and the modeling of user preferences.
d. acquisition of the knowledge contained within the DSS and the modeling of user preferences.
Difficulty: Medium Reference: p. 15
31.
Which of the following best describes the function and purpose of the inference engine?
a. It is the subsystem responsible for the acquisition and construction of knowledge rules.
b. It is a component of a DSS that is specifically intended to allow the user to access the internal components of that system in a relatively easy fashion and without having to know specifically how everything is put together or how it works.
c. It is a program module that activates domain knowledge and performs inferencing to work toward a solution or conclusion based upon the values for the facts given and the relationships or rules associated with them.
d. None of the above.
Difficulty: Hard Reference: p. 18
32.
The person who may work closely with the decision maker to assist in interpreting and explaining the DSS output is called the:
a. domain expert.
b. intermediary.
c. domain operator.
d. knowledge generator.
Difficulty: Easy Reference: p. 22
33.
Which of the following are the two primary support orientations for a DSS?
a. Data-centric and model-centric
b. Procedural and non-procedural
c. Programmed and non-programmed
d. Simulated and actual
Difficulty: Medium Reference: p. 8
34.
Which of the following is a characteristic of a DSS?
a. It is interactive and user-friendly.
b. It is generally developed using an iterative process.
c. I supports all phases of the decision-making process.
d. All of the above.
Difficulty: Easy Reference: p. 3
35.
Which of the following is not a benefit of DSS use?
a. It shortens the time associated with making a decision.
b. The power of the DSS is based upon the system it is running on.
c. It encourages exploration and discovery on the part of the decision maker.
d. All of the above are benefits.
Difficulty: Medium Reference: p. 5
36.
Gorry and Scott Morton’s framework for decision support classifies types of decisions as:
a. simplified and complex.
b. structured, semi-structured, and unstructured.
c. supported, semi-supported, and unsupported.
d. None of the above.
Difficulty: Easy Reference: p. 7
37.
Which of the following is a function of the presentation language of a DSS?
a. It allows for detailed report definition.
b. It allows for the creation of forms.
c. It provides for the presentation of data in multiple formats.
d. All of the above.
Difficulty: Easy Reference: p. 20
38.
Which of the following is not a DSS usage category?
a. Terminal mode
b. Clerk mode
c. Query mode
d. Subscription mode
Difficulty: Medium Reference: p. 23
39.
Which of the following is the DSS classification proposed by Donovan and Madnick?
a. Structured and unstructured
b. Mechanical and decisional
c. Formal and ad-hoc
d. None of the above.
Difficulty: Hard Reference: p. 25
40.
Which type of decision support system keeps track of a large amount of disparate documents?
a. Hypertext system
b. Document encyclopedia
c. Silver junction system
d. None of the above.
Difficulty: Easy Reference: p. 27
Essay Questions
41.
Describe the general functions of the Model Base Management System.
42.
What are some of the common characteristics of a decision support system?
43.
List the five components of a DSS
44.
Is a “universal DSS” possible? Why or why not?
45.
List the general functions of the DBMS.
46.
What are the benefits of DSS use?
47.
What are the two main responsibilities of the DBMS?
48.
How does knowledge get into the DSS? How can it be retrieved and organized as useful information?
49.
Compare and contrast data-centric versus model-centric systems, formal versus ad-hoc systems, and directed versus non-directed systems. What are the advantages and disadvantages of each type?
50.
Compare the benefits and limitations of highly procedural languages and low/non-procedural languages.
Chapter 2
Decisions and Decision Makers
True-False Questions
21.
The decision maker is considered both an element and participant in the decision.
Difficulty: Easy Reference: p. 35
22.
All decisions in an organization are ultimately made by a single individual.
Difficulty: Medium Reference: p. 38
23.
A problem is defined as the perception of a difference between the current state of affairs and a desired state of affairs.
Difficulty: Easy Reference: p. 36
24.
A typical decision is often made using the exact order suggested by a normative model of decision making and tends to use all of the steps contained in the model.
Difficulty: Medium Reference: p. 35
25.
Two examples of group decision making are organizational committees and juries.
Difficulty: Easy Reference: p. 39
26.
The manner in which a decision is made is referred to as decision style.
Difficulty: Easy Reference: p. 41
27.
Decision style is affected by the perception of the problem.
Difficulty: Medium Reference: p. 41
28.
The reason there are so many different types of DSSs is that there are many different types of decisions.
Difficulty: Easy Reference: p. 37
29.
Policies and procedures can affect organizational decision making.
Difficulty: Easy Reference: p. 48
30.
Simon proposed to classify problems from procedural to non-procedural.
Difficulty: Medium Reference: p. 50
31.
Programmed decisions are more difficult to automate in a DSS than non-programmed decisions.
Difficulty: Easy Reference: p. 51
32.
When conflict exists in either goals or approaches to the decision then Delbecq would classify that as the need for a creative decision.
Difficulty: Hard Reference: p. 55
33.
When a novel approach is needed to handle the complexity of the problem, then Delbecq would classify that as the need for a negotiated decision.
Difficulty: Hard Reference: p. 54
34.
Mintzberg classifies adaptive activities as characterized by high risk and motivated by the proactive and reactive considerations.
Difficulty: Hard Reference: p. 55
35.
According to Thompson, his classification scheme differentiates decisions based upon the type of activities with which the decision is most associated.
Difficulty: Medium Reference: p. 55
36.
The most clear-cut phase in the decision making process is the design phase.
Difficulty: Hard Reference: p. 58
37.
Simon referred to the process of search-limiting strategies as inferencing.
Difficulty: Medium Reference: p. 61
38.
Symptoms of a problem are identical to the problem itself.
Difficulty: Easy Reference: p. 63
39.
Stereotyping is a common perceptual block.
Difficulty: Easy Reference: p. 67
40.
The tendency to view alternatives as mutually exclusive events is a bias of individual
decision makers.
Difficulty: Medium Reference: p. 73
Multiple Choice Questions
21.
Which of the following is not part of the decision-making process?
a. Stimulus
b. Alternative selection
c. Decision maker
d. All of the above are part of the decision making process.
Difficulty: Easy Reference: pp. 36-37
22.
Which of the following is not a category of decision makers within an organization?
a. Individual decision makers
b. Team decision makers
c. Group decision makers
d. All of the above are categories of decision makers.
Difficulty: Easy Reference: pp. 38-39
23.
Which of the following is not a factor that affects decision style?
a. Context
b. Inference
c. Values
d. Perception
Difficulty: Hard Reference: p. 41
24.
Which of the following is not a decision style behavior?
a. Analytical
b. Behavioral
c. Conceptual
d. All of the above are decisions style behaviors.
Difficulty: Medium Reference: p. 44
25.
According to Mintzberg, which of the following is not a decision typology?
a. Entrepreneurial activities
b. Knowledge activities
c. Adaptive activities
d. Planning activities
Difficulty: Medium Reference: p. 55
26.
According to Delbecq, which of the following is not a classification scheme for negotiation?
a. Inferred decisions
b. Routine decisions
c. Creative decisions
d. Negotiated decisions
Difficulty: Medium Reference: pp. 54-55
27.
According to Thompson, which of the following is not a type of strategy based decision scheme?
a. Inspirational strategies
b. Judgmental strategies
c. Conversational strategies
d. Compromise strategies
Difficulty: Medium Reference: p. 55
28.
The perception of a problem context is typically caused by one or more:
a. crisis.
b. stimuli.
c. telephone calls.
d. catastrophes.
Difficulty: Easy Reference: p. 36
29.
The term used to describe the manner in which a manager makes decisions is called:
a. decision methodology.
b. decision model.
c. decision style.
d. cognitive style.
Difficulty: Easy Reference: p. 41
30.
In any problem context, before any effective investigation of alternative solutions can be conducted, the decision maker must first:
a. establish the available resources.
b. determine the best solution.
c. define the problem.
d. None of the above.
Difficulty: Easy Reference: p. 37
31.
A decision in which many people may serve to influence the final decision but only one decision maker has the authority and responsibility to make the decision is called a:
a. unilateral decision.
b. bilateral decision.
c. negotiated decision.
d. unanimous decision.
Difficulty: Medium Reference: p. 39
32.
Which of the following involves factors relating to the forces acting on the decision maker in the course of making the decision?
a. Problem space
b. Problem style
c. Problem context
d. Decision style
Difficulty: Easy Reference: p. 41
33.
Which of the following best describes the basic characteristics of the directive decision style? A directive decision style is characterized by:
a. a high need for structure in the problem context combined with a relatively low tolerance for context ambiguity and a tendency to function best in a verbal setting rather than through written communication or other multichannel media.
b. a relatively greater tolerance for context ambiguity, a tendency toward the need for greater volumes of information and the consideration of large sets of alternatives, and a preference for written communication media.
c. a long-term thinker with a high tolerance for ambiguity and a tendency to be much more of a “people person”.
d. conflict-averse with a tendency to rely on meetings and consensus for communicating to and organizing subordinates.
Difficulty: Medium Reference: p. 42
34.
Which of the following best describes the basic characteristics of the analytical decision style? An analytical decision style is characterized by:
a. a high need for structure in the problem context combined with a relatively low tolerance for context ambiguity and a tendency to function best in a verbal setting rather than through written communiqué or other multichannel media.
b. a relatively greater tolerance for context ambiguity, a tendency toward the need for greater volumes of information and the consideration of large sets of alternatives, and a preference for written communication media.
c. a long-term thinker with a high tolerance for ambiguity and a tendency to be much more of a “people person”.
d. conflict-averse with a tendency to rely on meetings and consensus for communicating to and organizing subordinates.
Difficulty: Medium Reference: p. 42
35.
Which of the following best describes the basic characteristics of the conceptual decision style? The conceptual decision style is characterized by:
a. a high need for structure in the problem context combined with a relatively low tolerance for context ambiguity and a tendency to function best in a verbal setting rather than through written communiqué or other multichannel media.
b. a relatively greater tolerance for context ambiguity, a tendency toward the need for greater volumes of information and the consideration of large sets of alternatives, and a preference for written communication media.
c. a long-term thinker with a high tolerance for ambiguity and a tendency to be much more of a “people person”.
d. conflict-averse with a tendency to rely on meetings and consensus for communicating to and organizing subordinates.
Difficulty: Medium Reference: p. 43
36.
Which of the following best describes the basic characteristics of the behavioral decision style? The behavioral decision style is characterized by:
a. a high need for structure in the problem context combined with a relatively low tolerance for context ambiguity and a tendency to function best in a verbal setting rather than through written communiqué or other multichannel media.
b. a relatively greater tolerance for context ambiguity, a tendency toward the need for greater volumes of information and the consideration of large sets of alternatives, and a preference for written communication media.
c. a long-term thinker with a high tolerance for ambiguity and a tendency to be much more of a “people person”.
d. conflict-averse with a tendency to rely on meetings and consensus for communicating to and organizing subordinates.
Difficulty: Medium Reference: p. 44
37.
Simon classified problems on a continuum that ranged from:
a. structured to unstructured.
b. parallel to perpendicular.
c. discrete to obtuse.
d. 1 to 10.
Difficulty: Easy Reference: p. 50
38.
Which of the following is not included in the Keen and Scott Morton classification of decision-making perspectives?
a. Process-oriented perspective
b. Knowledge-engineer perspective
c. Political perspective
d. Rational manager perspective
Difficulty: Medium Reference: p. 57
39.
Which of the following is not a satisficing strategy?
a. Simulation
b. “What-if” analysis
c. Markov analysis
d. Linear programming
Difficulty: Hard Reference: p. 59
40.
Which of the following is not an optimizing strategy?
a. Goal programming
b. Environmental impact analysis
c. Investment models
d. Transportation models
Difficulty: Hard Reference: p. 59
Essay Questions
41.
Define a ‘good decision’.
42.
List 10 common types of support provided by a DSS.
51.
Define Mintzberg’s activity-based decision typology.
52.
Define what is meant by the term bounded rationality.
53.
List the major components of the decision-making process.
54.
In which portion of the decision-making process is a DSS most helpful for decisionmakers? Why?
55.
List and briefly describe the classes of decision-makers.
56.
Describe the three forces that affect a particular individual’s decision style.
The three factors of context, perception, and values intertwine in their relationship to decision style. The problem context involves factors relating to the forces acting on the decisionmaker in the course of making the decision. Organizational and environment forces such as government regulation, new technologies, market competition, internal power struggles, etc. all serve to reform or affect the problem context. Further, forces of a more individual nature such as skill set, energy, motivation, and perceived abilities, among others can also serve as forces that shape the problem context for the decisionmaker. The totality of these forces must be balanced and managed by the decisionmaker during the problem-solving process.
57.
List and briefly describe the forces that can act on a problem context and on a decisionmaker during the course of making a decision.
58.
List the advantages of using heuristics.
Chapter 3
Decisions in the Organization
True-False Questions
41.
An organization includes issues of structure and resources.
Difficulty: Easy Reference: p. 88
42.
Organizations can be said to be defined by the decisions that they make.
Difficulty: Easy Reference: p. 88
43.
Group norms are not a dimension of organizational decision making.
Difficulty: Easy Reference: p. 90
44.
All organizational decisions are strategic in their nature.
Difficulty: Medium Reference: p. 90
45.
Strategic decisions are typically made at the middle management level and approved by senior management.
Difficulty: Medium Reference: p. 91
46.
The competence of decision-making ability at each level within an organization can affect the design of a DSS.
Difficulty: Medium Reference: p. 91
47.
Cultural fit is a method of viewing the relationship between organizational culture and decision making.
Difficulty: Medium Reference: p. 93
48.
An organization can either have an internal fit or external fit but may not have both simultaneously.
Difficulty: Medium Reference: p. 93
49.
Organizational culture can be a determinant of an organization’s willingness to change.
Difficulty: Easy Reference: p. 93
50.
While an organization may be greater than the sum of its parts, it does not allow its members to collectively pursue and achieve greater goals than they could by acting individually.
Difficulty: Medium Reference: p. 91
51.
The line personnel who make decisions regarding day-to-day activities relating to production or services are called operations personnel.
Difficulty: Medium Reference: pp. 90-91
52.
A good external fit suggests a culture that is shaped to both the organization’s strategy and its marketplace.
Difficulty: Medium Reference: p. 93
53.
Internal fit refers to the match between an organization’s culture and its leaders.
Difficulty: Medium Reference: p. 93
54.
Informal power is the term used to define how a manager exercises authority and whether he or she wishes to exercise the power available to them.
Difficulty: Hard Reference: p. 95
55.
Organizational politics influences organizational power.
Difficulty: Medium Reference: p. 95
56.
Organizational politics is always a disruptive factor in organizations.
Difficulty: Hard Reference: p. 96
57.
In the design of a DSS, organizational politics should be considered.
Difficulty: Easy Reference: p. 96
58.
The distinguishing characteristic of an ODSS over a GDSS is managerial control.
Difficulty: Easy Reference: p. 97
Multiple Choice Questions
19.
Which of the following is not a dimension of organizational decision making?
a. Group roles
b. Group processes
c. Group structure
d. All of the above are dimensions.
Difficulty: Easy Reference: pp. 88-89
20.
Which of the following is not an organizational decision level?
a. Operations
b. Tactical
c. Directing
d. Strategic
Difficulty: Medium Reference: p. 90
21.
Which of the following is not a characteristic of organizational culture?
a. Risk tolerance
b. Fault tolerance
c. Conflict tolerance
d. Communication patterns
Difficulty: Medium Reference: p. 92
22.
Which of the following is not a characteristic of organizational culture?
a. Direction
b. Control
c. Reward system
d. Personnel system
Difficulty: Medium Reference: p. 92
23.
The concept of viewing an organization as a “nexus of decisions” suggests that:
a. an organization is a unified system of resources defined and structured by a collective of functional and political subsystems bound by a set of stated goals and functioning within a set of loosely defined environments.
b. the organization’s purpose is to make decisions within a business environment; it is defined by its decision opportunities, authorities, and responsibilities.
c. an organization is a chaotic environment where decisions occur both randomly and without purpose.
d. None of the above.
Difficulty: Medium Reference: p. 88
24.
Of the various factors affecting organizational decisions, the concept of group structure is best defined as:
a. the relationships between the actual point of decision and the participants in the decision-making process.
b. each member of a decision-making body has one or more specified roles that can affect both the nature of the decision strategy employed as well as the scope of decision types assigned.
c. the process employed be a decision-making body can impact the type of decisions that can be effectively made by that body which can conversely affect the method or process that must be used to make those types of decisions.
d. issues related to shared meaning among the constituents, individual and collective social pressures, genres, and prescriptions regarding behavior, personal beliefs, and potential sanctions.
Difficulty: Hard Reference: p. 88
25.
Of the various factors affecting organizational decisions, the concept of group roles is best described as:
a. the relationships between the actual point of decision (the person or persons actually making the decision) and the participants in the decision-making process.
b. each member of a decision-making body has one or more specified purposes that can affect both the nature of the decision strategy employed as well as the scope of decision types assigned.
c. the process employed by a decision-making body can impact the type of decisions that can be effectively made by that body which can conversely affect the method or process that must be used to make those types of decisions.
d. issues relating to shared meaning among constituents, individual and collective social pressures, genres and prescriptions regarding behavior, personal beliefs, and potential sanctions.
Difficulty: Hard Reference: p. 89
26.
Of the various factors affecting organizational decisions, the circular nature of group process is best described as:
a. the relationships between the actual point of decision (the person or persons actually making the decision) and the participants in the decision-making process.
b. each member of a decision-making body has one or more specified roles that can affect both the nature of the decision strategy employed as well as the scope of decision types assigned.
c. the process employed by a decision-making body can impact the type of decisions that can be effectively made by that body which can conversely affect the method or process that must be used to make those types of decisions.
d. issues relating to shared meaning among the constituents, individual and collective social pressures, genres and prescriptions regarding behavior, personal beliefs, and potential sanctions.
Difficulty: Hard Reference: p. 89
27.
Of the various factors affecting organizational decisions, the concept of group norms is best defined as:
a. the relationships between the actual point of decision (the person or persons actually making the decision) and the participants in the decision-making process.
b. each member of a decision-making body has one or more specified roles that can affect both the nature of the decision strategy employed as well as the scope of decision types assigned.
c. the process employed by a decision-making body can impact the type of decisions that can be effectively made by that body which can conversely affect the method or process that must be used to make those types of decisions.
d. issues relating to shared meaning among the constituents, individual and collective social pressures, genres and prescriptions regarding behavior, personal beliefs, and potential sanctions.
Difficulty: Hard Reference: p. 90
28.
An organization, when viewed from a decision-making perspective, can be conceptualized by which of the following three discrete levels of hierarchy?
a. Planning, controlling, doing
b. Management, labor, stakeholders
c. Operations, planning, and strategic
d. Tactical, political, social
Difficulty: Easy Reference: p. 91
29.
Cultures that tend to minimize individual initiative and risk taking, such as those of a product-driven orientation:
a. tend to support a more centralized decision-making emphasis where operating procedures, policies, schedules, etc. are all prescribed from a central authority.
b. tend to adopt more routine technologies that provide additional stability to the organization.
c. tend to adopt nonroutine technologies that require adaptability.
d. Both a and b.
Difficulty: Medium Reference: p. 93
30.
Cultures where initiative, creativity, and risk-taking are supported or rewarded:
a. tend to support a more centralized decision-making emphasis where operating procedures, policies, schedules, etc. are all prescribed from a central authority.
b. tend to adopt more routine technologies that provide additional stability to the organization.
c. tend to adopt nonroutine technologies that require adaptability.
d. Both a and b.
Difficulty: Medium Reference: p. 93
31.
Which of the following would not be considered a characteristic of an organization’s culture?
a. Degree of individual initiative
b. Degree of risk tolerance
c. Degree of market share
d. Ccommunication patterns
Difficulty: Medium Reference: p. 92
32.
Which of the following is considered a characteristic of excellent companies?
a. They are hands-on and value driven.
b. They recognize that productivity is based on people.
c. They have a bias towards action.
d. All of the above.
Difficulty: Easy Reference: p. 94
33.
The concept which states that an individual will eventually be promoted to their level of incompetence is known as the:
a. Law of Incompetence.
b. Parretto Principle.
c. Peter Principle.
d. None of the above.
Difficulty: Hard Reference: p. 91
34.
The distinguishing characteristic of an ODSS over a GDSS is that of
a. size.
b. managerial control.
c. application.
d. Both b and c.
Difficulty: Easy Reference: p. 97
35.
Which of the following is not one of the five factors of power?
a. Judgment
b. Authority
c. Informal power
d. None of the above.
Difficulty: Easy Reference: p. 95
36.
Which of the following is true of organizational politics?
a. Politics can often serve to ensure an objective hearing of all sides of an issue.
b. Politics can facilitate the decision-making process.
c. Politics can facilitate organizational change.
d. All of the above are true.
Difficulty: Medium Reference: p. 96
37.
The ________________ level of an organization focuses on the implementation of decisions made at the highest level of the organization as well as decisions involving the acquisition of resources necessary to maintain desired capacities and outputs at the operations level.
a. operations
b. planning
c. strategic
d. tactical
or d Difficulty: Easy Reference: p. 91
38.
The members of the ___________________ level of an organization include the senior executives of the largest industrial and service firms in the world, the top administrators of the largest government agencies, and the generals and senior officers in the military.
a. operations
b. planning
c. strategic
d. None of the above.
Difficulty: Easy Reference: p. 91
Essay Questions
39.
Provide a definition for the term organization.
40.
Identify and describe the three levels of organizational decision making.
41.
Define organizational culture.
42.
List ten characteristics of organizational culture.
59.
List 10 of 12 significant elements of managerial decision-making power, as defined by Harrison (1995).
Chapter 4
Modeling Decision Processes
True-False Questions
59.
The typical decision-maker, more often than one might imagine, fails to formally and concisely identify the problem at hand before beginning the process of solving it.
Difficulty: Easy Reference: p. 103
60.
A problem is defined as the difference between the current state of affairs and the desired state of affairs.
Difficulty: Easy Reference: p. 103
61.
A common error when creating a problem statement is to prematurely focus on the possible solutions.
Difficulty: Easy Reference: p. 103
62.
One way to determine what the real underlying problem is to expore the reasons why an alternative is viable.
Difficulty: Medium Reference: p. 103
63.
The priorities of a decision maker are determined by the size of the solution.
Difficulty: Medium Reference: p. 104
64.
The priorities of a decision maker are affected by the scope of the problem.
Difficulty: Easy Reference: p. 104
65.
A designer must never revise a decision made at one point in the process to account for a change made in another.
Difficulty: Medium Reference: pp. 105-106
66.
There are always at least two possible alternative problem solutions.
Difficulty: Hard Reference: p. 104
67.
Problem structures can be described in terms of three fundamental components: (1) choices, (2) uncertainties, and (3) objectives.
Difficulty: Medium Reference: p. 110
68.
Implicit in the concept of choice is the existence of multiple alternatives.
Difficulty: Easy Reference: p. 104
69.
In an influence diagram, the three components of a problem structure are represented by specific shapes and are combined and connected to represent the problem being modeled.
Difficulty: Medium Reference: pp. 106-107
70.
Although the solution may be obvious, problem structures always have a clear beginning.
Difficulty: Hard Reference: p. 112
71.
An optimal solution is always guaranteed when using a simulation model.
Difficulty: Medium Reference: p. 115
72.
Conceptual models can be thought of as analogies to the problem context.
Difficulty: Medium Reference: p. 117
73.
In a deterministic model, a variable can have multiple values and must therefore be described by a probability function.
Difficulty: Medium Reference: p. 114
74.
In a stochastic model, no variable can take on more than one value at a given time.
Difficulty: Medium Reference: p. 114
75.
According to Howard’s test of clarity, the events of every model should be fully determined without interpretation.
Difficulty: Medium Reference: p. 119
76.
Decisions made in conditions of certainty are the most difficult.
Difficulty: Easy Reference: p. 120
77.
Hayes Model Base Rule is used to determine the appropriate forecasting technique for DSSs.
Difficulty: Hard Reference: p. 129
78.
Odds forecasting is a common technique for eliciting subjective probability.
Difficulty: Medium Reference: p. 125
Multiple Choice Questions
21.
Which of the following is not a component of a problem statement?
a. The desired state of affairs
b. The current state of affairs
c. The past state of affairs
d. None of the above.
Difficulty: Medium Reference: p. 103
22.
Which of the following is not part of the design of a problem structure?
a. The relationship between elemental details and the final appearance of the solution
b. The interim solution
c. The final problem solution
d. None of the above.
Difficulty: Easy Reference: p. 104
23.
Which of the following is not a tool for modeling the structure of a problem?
a. Problem analysis case
b. Decision tree
c. Influence diagram
d. None of the above.
Difficulty: Easy Reference: pp. 106-108
24.
Which of the following is not a decision tree rule?
a. The branches represent all possible outcomes.
b. The branches are structured to allow for multiple choices per branch.
c. All possible alternatives are fully mapped.
d. None of the above.
Difficulty: Hard Reference: p. 108
25.
Which of the following is not a decision model classification?
a. Domain-specific models
b. Abstract variation models
c. Stochastic models
d. None of the above.
Difficulty: Medium Reference: p. 114
26.
Which of the following is not a requirement of probability?
a. All probabilities must be within the range of -1 to 1.
b. The probabilities of all individual outcomes of an event must add up to the probability of their union.
c. The total probability of the complete set of outcomes must be equal to 1.
d. All of the above are requirements of probability.
Difficulty: Hard Reference: p. 120
27.
Probability can be expressed as:
a. long-run.
b. subjective.
c. logical.
d. All of the above.
Difficulty: Easy Reference: p. 121
28.
Which of the following is not a technique for forecasting probability?
a. Logical forecasting
b. Direct forecasting
c. Odds forecasting
d. Comparison forecasting
Difficulty: Easy Reference: p. 124
29.
Models that do not explicitly acknowledge time are called:
a. static models.
b. dynamic models.
c. simulation models.
d. stochastic models.
Difficulty: Easy Reference: p. 113
30.
The concept of __________ suggests that while a probability may be derivable, its accuracy may not be acceptable under any circumstances.
a. subjective probability
b. logical probability
c. long-run probability
d. stochastic probability
Difficulty: Medium Reference: p. 123
31.
Which of the following affects the selection of a forecasting technique?
a. Problem structure
b. Availability
c. Problem size
d. All of the above.
Difficulty: Easy Reference: p. 129
32.
Which of the following affects the selection of a forecasting technique?
a. Precision
b. Complexity
c. DSS designer preference
d. All of the above.
Difficulty: Easy Reference: p. 129
33.
Rather than a single probability estimation we might benefit from an estimation of the worst-case scenario and the best-case scenario. Properly constructed, we can say that the actual probability estimate lies somewhere between these two values. This range of values is referred to as a ________.
a. probability estimation
b. t-test
c. logical probability
d. confidence interval
Difficulty: Medium Reference: p. 130
34.
A method used to determine the degree to which the alteration of an underlying assumption has a material effect on the results obtained from a model is known as:
a. simulation.
b. sensitivity analysis.
c. discriminant validity.
d. None of the above.
Difficulty: Medium Reference: p. 131
35.
Which of the following is not a suitable technique for eliciting numerical subjective probability estimations that can then be combined with other estimates using the laws of probability?
a. Direct forecasting
b. Odds forecasting
c. Ad hoc forecasting
d. Comparison forecasting
Difficulty: Hard Reference: p. 129
36.
A model in which at least one of the variables in the model is uncertain and must be described by some probability function is known as a:
a. static model.
b. stochastic model.
c. deterministic model.
d. dynamic model.
Difficulty: Easy Reference: p. 114
37.
A model which focuses on the mathematical precision with which various outcomes can be predicted is referred to as a(n):
a. static models.
b. dynamic models.
c. simulation models.
d. abstract models.
Difficulty: Easy Reference: p. 113
38.
Which of the following is true of Howard’s Test of Clarity?
a. The influence diagram contains at least three alternatives.
b. All of the components of the context model are clearly defined.
c. Long-run probability is utilized.
d. All of the above.
Difficulty: Hard Reference: p. 119
39.
In any choice there is a(n) _____ probability of at least one alternative being selected and there is an ____ probability of any particular one being selected.
a. unequal, equal
b. 0%, unequal
c. 100%, equal
d. 100%, unequal
Difficulty: Hard Reference: p. 121
40.
Which type of forecasting presents the decision maker with a choice between participating in one or two lottery-type games?
a. Comparison forecasting
b. Odds forecasting
c. Direct probability forecasting
d. Calibration forecasting
Difficulty: Easy Reference: p. 126
Essay Questions
41.
Identify the steps in creating a simulation model.
42.
Briefly describe the disadvantages of simulation modeling.
60.
List and briefly describe the types of abstract models.
61.
Define sensitivity analysis and state its value to decisionmakers.
62.
List and briefly describe the various types of probabilities.
Chapter 5
Group Decision Support and Groupware Technologies
True-False Questions
79.
A group can be defined as a simple collective entity that is independent of its members.
Difficulty: Easy Reference: p. 141
80.
A group can be defined by the structure of the problem context.
Difficulty: Medium Reference: p. 142
81.
MDM is defined as an activity conducted by a collective entity composed of two or more individuals and characterized in terms of both the properties of the collective entity as well as its individual members.
Difficulty: Easy Reference: p. 142
82.
MDMs can be classified in terms of the degree of centralization characterized by each of the four network structures.
Difficulty: Easy Reference: p. 143
83.
In a chain network, each participant can communicate with the decision maker at the center but not with each other.
Difficulty: Medium Reference: p. 144
84.
In a wheel network, the decision maker can communicate with anyone.
Difficulty: Medium Reference: p. 143
85.
In a circle network, all members have an equal opportunity for communication.
Difficulty: Easy Reference: p. 144
86.
The completely connected network structure is the least restrictive structure.
Difficulty: Easy Reference: p. 145
87.
The chain network displays a high degree of centrality and is appropriate for routine or recurring decisions with high-probability outcomes.
Difficulty: Medium Reference: p. 144
88.
The circle network serves as the basis for the group and committee MDM structures and is often employed in situations where negotiation or consensus must be the basis for the final decision.
Difficulty: Medium Reference: pp. 144-145
89.
When the expertise of the decision maker is critical, then the most appropriate decision structure is a committee.
Difficulty: Hard Reference: p. 146
90.
In group decision making, the factor that has the greatest impact is the size of the group.
Difficulty: Hard Reference: p. 147
91.
Think-tank is the term referred to as a mode of thinking that people engage in when their desire to fit in overrides their decision-making ability.
Difficulty: Medium Reference: p. 148
92.
One common method used to control sources of potential conflict is participant anonymity.
Difficulty: Easy Reference: p. 149
93.
A GDSS is a collective of computer-based technologies used to aid multiparticipant efforts directed at identifying and addressing problems, opportunities, and issues.
Difficulty: Medium Reference: p. 153
94.
An ODSS is a complex system of computer-based technologies, including those that facilitate communication that provides support for decision makers spanning the range of organizational roles and functional levels, and accommodates decision contexts that cut across organizational units.
Difficulty: Easy Reference: p. 153
95.
Process structure of an MDM involves various mechanisms focused on facilitating participant interaction.
Difficulty: Medium Reference: p. 155
96.
Groupware is focused on issues related to collaborative processes among people.
Difficulty: Easy Reference: p. 160
97.
E-mail would not be considered a type of groupware because it is an asynchronous process.
Difficulty: Medium Reference: p. 162
98.
Nominal group techniques works best when there is a single decision maker structure.
Difficulty: Medium Reference: p. 165
Multiple Choice Questions
21.
Which of the following is not a characteristic of a highly centralized network structure?
a. They are efficient for routine and recurring decisions.
b. They tend to produce lower average levels of satisfaction among the participants.
c. They promote innovative solutions.
d. They tend to result in a stable set of interactions among the participants.
Difficulty: Medium Reference: p. 145
22.
Which of the following is true of a completely connected network structure?
a. They tend to produce lower average levels of satisfaction among the participants.
b. They tend to strengthen the leadership position of the central members.
c. They promote creative solutions.
d. They tend to result in a stable set of interactions among the participants.
Difficulty: Easy Reference: p. 145
23.
Which of the following is a factor used in determining decision structure?
a. The degree of structuredness of the problem structure
b. The probability of acceptance of an autocratic decision
c. The importance of the quality of the decision
d. All of the above.
Difficulty: Easy Reference: p. 146
24.
Which of the following is not true regarding the relationship between group size and its affect on MDM?
a. Participant interaction increases as the size increases.
b. Affective relationships tend to decrease as size increases.
c. Central leadership tends to increase as size increases.
d. None of the above.
Difficulty: Hard Reference: p. 148
25.
Which of the following communication networks displays a high degree of centrality and is appropriate for routine or recurring decisions with high-probability outcomes?
a. Wheel
b. Chain
c. Circle
d. Completely connected
Difficulty: Easy Reference: p. 144
26.
Which of the following is not considered one of the four basic types of communication networks?
a. Wheel
b. Chain
c. Circle
d. Semi-connected
Difficulty: Easy Reference: p. 145
27.
Which of the following networks is most appropriate when routine or recurring decisions are being made?
a. Wheel
b. Chain
c. Circle
d. Completely connected
Difficulty: Easy Reference: p. 144
28.
Which of the following network structures serves as the basis for the group and committee MDM structure and is often employed in situations where negotiation or consensus must be the basis for the final decision?
a. Wheel
b. Chain
c. Circle
d. Completely connected
Difficulty: Easy Reference: pp. 144-145
29.
A mode of thinking that people engage in when they are deeply involved in a cohesive ingroup, where the members’ striving for unanimity overrides their motivation to realistically appraise alternative courses of action is known as:
a. structured decision making.
b. groupthink.
c. team MDM.
d. MDM analysis.
Difficulty: Easy Reference: p. 148
30.
A(n) _____ is a complex system of computer-based technologies, including those that facilitate communication, that provides support for decision-makers spanning the range of organizational roles and functional levels and accommodates decision contexts that cut across organizational units.
a. ODSS
b. GSS
c. GDSS
d. DSS
Difficulty: Medium Reference: p. 153
31.
A(n) ____ is a collective of computer-based technologies used to aid multiparticipant efforts directed at identifying and addressing problems, opportunities and issues.
a. ODSS
b. GSS
c. GDSS
d. DSS
Difficulty: Medium Reference: p. 153
32.
A(n) ___ is a collective of computer-based technologies that are specifically designed to support the activities and processes related to multiparticipant decision making.
a. ODSS
b. GSS
c. GDSS
d. DSS
Difficulty: Medium Reference: p. 154
33.
A(n) ____ is a system under the control of one or more decision makers that assists in the activity of decision making by providing an organized set of tools intended to impart structure to portions of the decision-making situation and to improve the ultimate effectiveness of the decision outcome.
a. ODSS
b. GSS
c. GDSS
d. DSS
Difficulty: Medium Reference: p. 154
34.
Which of the following is not one of the four basic approaches that have been identified through which MDM support can be provided?
a. Process support
b. Process structure
c. Task support
d. Organizational structure
Difficulty: Medium Reference: p. 155
35.
______ involves providing various mechanisms focused on facilitating participant interaction, communication, knowledge gathering, and memory. These mechanisms are omnipresent in all current deployments of GSS and groupware applications.
a. Process support
b. Process structure
c. Task support
d. Task structure
Difficulty: Medium Reference: p. 155
36.
______ focuses on mechanisms that serve to govern the various communication activities among participants including the pattern of interaction, the timing, and sometimes even the content.
a. Process support
b. Process structure
c. Task support
d. Task structure
Difficulty: Medium Reference: p. 155
37.
______ involves the application of mechanisms that can select, organize, or even derive information and knowledge that is specifically relevant to the task or decision at hand.
a. Process support
b. Process structure
c. Task support
d. Task structure
Difficulty: Medium Reference: p. 155
38.
The _____________ MDM system is primarily intended to focus on facilitation of communication among the participants. Its main objective is to hasten and stimulate the exchange of messages and to reduce or remove the inherent barriers to communication associated with MDM activities.
a. Level 1
b. Level 2
c. Level 3
d. None of the above.
Difficulty: Medium Reference: p. 157
39.
The _____________ MDM systems are designed to reduce uncertainty that can evolve from an MDM problem-solving activity. Both process and task structuring mechanisms are typically found in this class of MDM support.
a. Level 1
b. Level 2
c. Level 3
d. None of the above.
Difficulty: Medium Reference: p. 157
40.
The _____________ system contains all of the features of its predecessors and expands the support mechanisms through an increase in process structuring techniques intended to control participant interaction.
a. Level 1
b. Level 2
c. Level 3
d. None of the above.
Difficulty: Medium Reference: p. 157
Essay Questions
41.
Identify the factors used in determining decision structure.
42.
What are the potential consequences of groupthink?
63.
Define the term multiparticipant decision maker (MDM).
64.
Define groupware. Where is it applicable?
65.
List the forces that describe groupware development.
Chapter 6
Executive Information Systems
True-False Questions
99.
An EIS is a special type of DSS designed to facilitate the analysis of information to support strategic decision-making.
Difficulty: Easy Reference: p. 174
100.
An EIS is designed to support the CEO of a firm
Difficulty: Easy Reference: p. 174
101.
An EIS is a unique DSS designed exclusively to analyze the operations of a firm.
Difficulty: Easy Reference: p. 174
102.
An EIS can be designed and built quickly because it only deals with summarized information.
Difficulty: Medium Reference: p. 175
103.
A sales report showing revenue against forecast targets along with projections for the next two quarters is an example of an EIS output.
Difficulty: Medium Reference: p. 176
104.
The ability to perform drill down analysis is an important feature of an EIS.
Difficulty: Easy Reference: p. 176
105.
A well designed EIS will replace the need for MIS applications
Difficulty: Medium Reference: p. 176
106.
A well designed EIS replaces the need for all other DSSs within an organization
Difficulty: Medium Reference: p. 176
107.
Executives spend more time on disturbance management than organizational staffing.
Difficulty: Medium Reference: pp. 178-179
108.
The majority of executive time is spent in some form of disturbance management activity.
Difficulty: Hard Reference: pp. 178-179
109.
The total study method, critical success factor method or key indicator method could be used to define an EIS
Difficulty: Easy Reference: pp. 182-183
110.
An EIS normally requires unique hardware configurations, making them expensive to build.
Difficulty: Hard Reference: p. 184
111.
An EIS normally requires unique software components.
Difficulty: Medium Reference: p. 185
112.
An organization that does not wish to build their own EIS can purchase one “off-the-shelf”.
Difficulty: Easy Reference: p. 185
113.
In the structural perspective of the EIS development framework, the focus is on people and data as they relate to the EIS.
Difficulty: Medium Reference: p. 188
114.
The structural perspective of the EIS development framework builds upon the elements and their relationships contained within the structural model and adds a time dimension to the framework. In this component, the various activities and sequences of events are delineated and actual project management issues relating to time, critical path, and milestones are established.
Difficulty: Medium Reference: pp. 188-189
115.
The dialog system of an EIS contains an action language where the user is directed in how to use the system, and learns where the various commands and elements of manipulation are contained and processed.
Difficulty: Easy Reference: p. 189
116.
The knowledge base in an EIS is the sum of what the executive knows about using the system and all of the support mechanisms designed to assist in its use.
Difficulty: Medium Reference: p. 190
117.
Two organizational limitations of an EIS are time bias and loss of managerial synchronization.
Difficulty: Easy Reference: p. 191
118.
The development framework of an EIS is used to establish development guidelines.
Difficulty: Easy Reference: p. 190
Multiple Choice Questions
21.
Which of the following is a computer-based system intended to facilitate and support the information and decision-making needs of senior executives by providing easy access to both internal and external information relevant to meeting stated goals of the organization?
a. EIS
b. ES
c. DSS
d. Data Warehouse
Difficulty: Easy Reference: p. 175
22.
Which of the following is a characteristic of an EIS?
a. Tailored to individual executives
b. Can present information in multiple formats
c. Provides tools to extract, filter and track critical information
d. All of the above.
Difficulty: Easy Reference: p. 175
23.
Which of the following is an activity performed by managers?
a. Staffing
b. Directing
c. Organizing
d. All of the above.
Difficulty: Easy Reference: p. 178
24.
Which of the following is not a common characteristic of executives?
a. They are future-oriented and focus on strategic activities.
b. They have narrow spans of control.
c. They are responsible for establishing policies.
d. They are concerned with internal and external issues.
Difficulty: Medium Reference: p. 178
25.
Which of the following is not a method for determining executive information needs?
a. Null method
b. Normal method
c. By-product method
d. Total study method
Difficulty: Medium Reference: p. 182
26.
Which method for determining executive needs primarily uses traditional TPS and MIS applications as it source of information?
a. Null method
b. Normal method
c. By-product method
d. Total study method
Difficulty: Medium Reference: p. 182
27.
Which method for determining executive needs could best be described by the phrase management by walking around?
a. Null method
b. Normal method
c. By-product method
d. Total study method
Difficulty: Medium Reference: p. 182
28.
Which method for determining executive needs gathers information from a sample of top-level executives concerning the totality of information needs?
a. Null method
b. Normal method
c. By-product method
d. Total study method
Difficulty: Medium Reference: p. 183
29.
Which method for determining executive needs is the most comprehensive?
a. Normal method
b. Key indicators method
c. Case study method
d. Critical success factors method
Difficulty: Method Reference: p. 183
30.
The _______________ method for determining executive information needs is based on three basic notions: 1) The health of an organization can be determined by comparison to a set of key financial indicators; 2) organizations can be managed based on exception reporting where only those areas operating outside of a preestablished set of norms are of interest; 3) and technology is available to allow for flexible display of key indicator information in graphical form.
a. key indicator
b. critical success factor
c. normal
d. by-product
Difficulty: Easy Reference: p. 182
31.
Using an EIS to explore the underlying data used to compile the current ratio would be an example of which of the following activities?
a. Compilation
b. Aggregation
c. Drill down analysis
d. None of the above.
Difficulty: Hard Reference: p. 176
32.
When something unexpected occurs, particularly something that could materially and negatively impact the financial health of the organization, the immediate attention of executives and the deployment of resources are usually warranted. Executive activity during these periods is called:
a. entrepreneurial.
b. disturbance management.
c. resource allocation.
d. negotiation.
Difficulty: Easy Reference: p. 178
33.
Which of the following is not a component of an EIS development framework?
a. Structural perspective
b. Intelligent knowledge base
c. User-system dialog
d. None of the above.
Difficulty: Medium Reference: p. 188
34.
Which of the following would not be considered a benefit of a client/server environment?
a. Reduction of investment costs in new computer hardware
b. Establishment of a more flexible and responsive platform
c. Increased control over locally stored data
d. Multiple views of geographically dispersed data
Difficulty: Easy Reference: p. 184
35.
The ____________ portion of the EIS development framework builds upon the elements and their relationships contained within the structural model and adds a time dimension to the framework. In this component, the various activities and sequences of events are delineated and actual project management issues relating to time, critical path, and milestones are established.
a. structural
b. development process
c. dialog system
d. knowledge base
Difficulty: Easy Reference: p. 189
36.
The _______________ portion of an EIS contains an action language where the user is directed in how to use the system, and learns where the various commands and elements of manipulation are contained and processed. The action language element can be thought of as the incoming communication channel from the executive to the EIS.
a. structural
b. development process
c. dialog system
d. knowledge base
Difficulty: Easy Reference: p. 189
37.
The _________________ portion of an EIS is the sum of what the executive knows about using the system and all of the support mechanisms designed to assist in its use.
a. structural
b. development process
c. dialog system
d. knowledge base
Difficulty: Easy Reference: p. 190
38.
_______________ activities fall under the general heading of strategic planning tasks. Executives spent a significant portion of their time focusing on the selection, design, and implementation of improvements and projects intended to improve performance and initiate controlled change within the organization.
a. Entrepreneurial
b. Disturbance management
c. Resource allocation
d. Negotiation
Difficulty: Easy Reference: p. 180
39.
Managers at various levels are given authority to manage and deploy assets from a predetermined allocation and based upon a control mechanism such as a budget or operational plan. The authority to deploy those assets and the various behind the scenes activities to obtain them normally performed by top executives is associated with which of the following activities?
a. Entrepreneurial
b. Disturbance management
c. Resource allocation
d. Negotiation
Difficulty: Easy Reference: p. 180
40.
Executives are charged with the responsibility of representing the organization in both internal and external disputes. Typically, this role involves the resolution of disputes and conflicts and, thus, involves a significant amount of negotiation among the parties. This type of activity is called:
a. entrepreneurial.
b. disturbance management.
c. resource allocation.
d. negotiation.
Difficulty: Easy Reference: p. 180
Essay Questions
41.
List the characteristics of an Executive Information System.
42.
Define an Executive Information System.
66.
List the Common Characteristics of Executives.
67.
List and briefly describe several EIS limitations.
68.
Briefly describe the EIS of tomorrow.
Chapter 7
Expert Systems and Artificial Intelligence
True-False Questions
119.
An Expert System is designed to solve a specific knowledge domain problem.
Difficulty: Easy Reference: p. 208
120.
Artificial Intelligence can be defined as the study of how to make computers do things that people do better.
Difficulty: Easy Reference: p. 208
121.
Reverse reasoning begins with a series of subproblems and builds into one cohesive problem statement.
Difficulty: Medium Reference: p. 208
122.
All expert systems are based upon the use of reverse reasoning.
Difficulty: Easy Reference: p. 208
123.
The first artificial intelligence system was referred to as LISP.
Difficulty: Medium Reference: p. 208
124.
Categorization involves the creation of a loose set of hierarchies where lower-level pieces of information inherit characteristics from a higher-level category.
Difficulty: Medium Reference: p. 209
125.
Reasoning by expectations uses components of heuristics and categorization.
Difficulty: Medium Reference: p. 210
126.
Once we have experienced a particular situation or phenomena enough, we begin to expect it to appear in a certain manner or under a predictable set of conditions.
Difficulty: Medium Reference: p. 211
127.
Rule-based reasoning is a process in which the computer is given the characteristics of the problem space in the form of input values. It then uses the rules contained within its knowledge base to methodically change the state of the problem space to the desired condition.
Difficulty: Hard Reference: pp. 211-212
128.
The form of knowledge that is formed from antecedents and consequents is referred to as inferential knowledge.
Difficulty: Medium Reference: p. 212
129.
The form of knowledge where the conditions take the form of a stated situation and the operative becomes an action to take when the stated situation is logically true is referred to as procedural knowledge.
Difficulty: Medium Reference: p. 212
130.
The form of knowledge whereby a conclusion is reached as a result of one or more premises being established is referred to as declarative knowledge.
Difficulty: Medium Reference: p. 212
131.
In an object network, concepts are represented as nodes and the arcs connecting the nodes represent their relationships.
Difficulty: Easy Reference: p. 213
132.
Representations of objects that are typical of a category are referred to as frames.
Difficulty: Medium Reference: p. 213
133.
In a frame, a trigger is a short procedure that can be triggered whenever a slot is created, modified or accessed.
Difficulty: Hard Reference: p. 214
134.
Frames are the most useful knowledge domain for analyzing legal precedent.
Difficulty: Hard Reference: p. 215
135.
Genetic algorithms figure out which rules from prior cycles did not fire, which rules from the prior cycle will not fire in the next cycle, and which rules from the prior cycle that did not fire are most likely to fire next.
Difficulty: Medium Reference: p. 216
136.
Neural networks are the branch of AI that most closely resemble how the human brain operates.
Difficulty: Medium Reference: p. 217
137.
The inference engine of an ES contains the specific knowledge collected from the sample of domain experts.
Difficulty: Easy Reference: p. 219
138.
The inference engine performs deductions or inferences based on rules or facts. In addition, it is capable of performing inexact or fuzzy reasoning based on probability or pattern matching.
Difficulty: Easy Reference: p. 220
Multiple Choice Questions
21.
Which of the following is not true of artificial intelligence?
a. AI focuses on how people think.
b. AI focuses on how people reason.
c. AI translates understanding into computer systems that can perform the same actions.
d. All of the above are true.
Difficulty: Easy Reference: p. 209
22.
Which of the following is not a type of reasoning?
a. Heursitics
b. Past experience
c. Cognitive idealism
d. None of the above.
Difficulty: Easy Reference: p. 210
23.
Which reasoning type is the most common?
a. Categorization
b. Specific rules
c. Expectations
d. None of the above.
Difficulty: Medium Reference: p. 209
24.
Which type of reasoning uses components of heuristics and categorization?
a. Specific rules
b. Expectations
c. Past experience
d. Cognitive idealism
Difficulty: Medium Reference: p. 210
25.
Which of the following forms of knowledge can be encoded via a rule set?
a. Procedural knowledge
b. Declarative knowledge
c. Inferential knowledge
d. All of the above.
Difficulty: Medium Reference: p. 212
26.
Which of the following represents entities as nodes and the arcs that connect the nodes represent relationships?
a. Object network
b. Frames
c. Knowledge network
d. None of the above.
Difficulty: Medium Reference: p. 213
27.
Which Of the following is not a daemon?
a. If modified
b. If inquiry
c. If deleted
d. If necessary
Difficulty: Medium Reference: p. 214
28.
The concept of frames is analogous to which human reasoning method?
a. Past experience
b. Heuristics
c. Categorization
d. None of the above.
Difficulty: Hard Reference: p. 215
29.
Which of the following is most useful in a knowledge domain where precedence reasoning is most appropriate?
a. Frames
b. Pattern recognition
c. Case-based reasoning
d. Rete algorithms
Difficulty: Medium Reference: p. 215
30.
Which branch of AI most closely resembles how the human brain operates?
a. Genetic algorithms
b. Neural networks
c. Machine learning
d. Rete algorithms
Difficulty: Medium Reference: p. 217
31.
Which classification of AI relies on learning from past experiences using examples and analogies?
a. Machine learning
b. Frames
c. Pattern recognition
d. Genetic algorithms
Difficulty: Easy Reference: p. 216
32.
Which component of an ES contains the domain-specific knowledge collected from the sample of domain experts during the design stage?
a. User interface
b. Knowledge base
c. Inference engine
d. All of the above.
Difficulty: Easy Reference: p. 219
33.
Which of the following is not an example of a heuristic?
a. If the meal includes red meat, then chose a red wine.
b. If the Los Angeles Lakers are playing at home, they will be favored to win.
c. Bonds always hits a home run following an intentional walk.
d. Tuesday always follows Monday.
Difficulty: Medium Reference: p. 210
34.
The _____________ performs deductions or inferences based on rules or facts. In addition, it is capable of performing inexact or fuzzy reasoning based on probability or pattern matching.
a. inference engine
b. dialog system
c. database
d. knowledge base
Difficulty: Easy Reference: p. 220
35.
Chaining is a simple method used by most IEs to produce a line of reasoning. Using this method the set of rules are organized in a recursive manner such that a fact concluded by one rule is used as the premise for the next. The two types of chaining bases which are possible in an ES are:
a. straight and link.
b. forward and backward.
c. upward and downward.
d. inside and outside.
Difficulty: Medium Reference: p. 220
36.
The ES component which provides the ES user with an area of working memory to use as a workspace for the various other components of the ES is the:
a. dialog system.
b. user interface.
c. knowledge base.
d. blackboard.
Difficulty: Medium Reference: p. 222
37.
Which of the following is not a candidate situation for ES opportunities?
a. Need to define a repetitive process to automate a manufacturing process
b. Need to evaluate a process
c. Need to control or govern a particular activity
d. Need to understand the nature of a given situation
Difficulty: Hard Reference: p. 224
38.
Which of the following is a candidate situation for ES opportunities?
a. Need for diagnosis of a problem situation
b. Need to predict the outcome of a current or future event
c. Need to evaluate and assess a prior event
d. All of the above.
Difficulty: Easy Reference: p. 224
39.
Which of the following is not a criterion for the evaluation of an expert system?
a. The system should be responsive and easy to use.
b. The knowledge base should contain generally accepted knowledge.
c. The explanatory facility should be user-friendly.
d. All of the above are criteria.
Difficulty: Easy Reference: p. 226
40.
Which of the following is a limitation associated with common ES task categories?
a. Data may be inaccurate.
b. Data may be missing.
c. Multiple symptoms can confound diagnosis.
d. All of the above are limitations.
Difficulty: Easy Reference: p. 228
Essay Questions
41.
Provide a definition for the term Expert System.
42.
List and explain the different types of human reasoning processes.
43.
What are the benefits of expert systems?
44.
Identify eight problems or limitations associated with expert systems.
45.
Define each of the following terms:
approach of the life sciences of “taking apart” living organisms to see how they work, AL attempts to “put together” systems that behave like living organisms.
Chapter 8
Knowledge Engineering and Acquisition
True-False Questions
139.
Both knowledge engineers and system analysts have the same goal; to create a thorough specification of an information system that can be successfully implemented.
Difficulty: Easy Reference: p. 238
140.
Knowledge engineers need to have a high degree of domain knowledge combined with a broad set of system development skills.
Difficulty: Easy Reference: p. 238
141.
Each expert system is a one-of-a-kind system and its success is predicated on the skill of the KEs to extract knowledge that is deeply hidden in the mind of a human expert.
Difficulty: Easy Reference: p. 238
142.
Data are facts, measurements, or observations with or without context.
Difficulty: Easy Reference: p. 240
143.
Apples and oranges are an example of data.
Difficulty: Medium Reference: p. 240
144.
Information is knowledge organized in a manner as to render it useful and relevant to a problem solver in making decisions.
Difficulty: Medium Reference: p. 240
145.
Knowledge is the application of a combination of instincts, ideas, rules, procedures, and information to guide the actions and decisions of a problem solver within a particular problem context.
Difficulty: Easy Reference: p. 240
146.
Knowledge is an interpretation made by the mind.
Difficulty: Medium Reference: p. 240
147.
If a system contains a knowledge representation, such as a model or rule set, of something, then the system itself can also be said to have knowledge, namely the knowledge embodied in that representation about that thing.
148.
In the knowledge representation perspective, knowledge is seen as a set of stocks or inventories in which items are transferred from one stock to another based on process or external event.
Difficulty: Hard Reference: p. 241
149.
As the state of knowledge is increased, the chance for information overload is diminished and the quality of the knowledge is extended.
Difficulty: Medium Reference: p. 241
150.
In knowledge acquisition (KA), the elicitation, gathering, organizing, and formalization of the knowledge of experts in a specific domain is conducted with the goal of transforming that knowledge into some computer-usable representation.
Difficulty: Easy Reference: p. 243
151.
Descriptive knowledge may be analyzed using procedural knowledge.
Difficulty: Medium Reference: p. 242
152.
The acquisition of knowledge from external sources must be an active process.
Difficulty: Hard Reference: p. 242
153.
The primary functions of the performance model are to fully define the task under study, assist in the selection of the expert(s), establish the user characteristics and performance criteria for the system, and to function as an interpretive framework for protocol analysis of the experts’ responses.
Difficulty: Medium Reference: p. 244
154.
Knowledge engineer-driven acquisition is considered the most common approach to information gathering.
Difficulty: Easy Reference: p. 245
155.
Kim and Courtney proposed that knowledge be classified across strategic and performance dimensions.
Difficulty: Medium Reference: p. 245
156.
When using the expert-driven approach to KA, the expert encodes his or her own expertise and knowledge and enters it directly into the computer system.
Difficulty: Easy Reference: p. 245
157.
Interviewing is probably the most widely used and familiar of all KA techniques.
Difficulty: Easy Reference: p. 247
158.
Validation is concerned with whether or not the system we built conforms to its original specifications.
Difficulty: Hard Reference: p. 254
Multiple Choice Questions
21.
Which of the following is an example of data?
a. 23, 24, 25
b. 30, 13, 12
c. John, Adam, Kim
d. All of the above.
Difficulty: Easy Reference: p. 240
22.
Which of the following includes the application of a combination of instincts, ideas, rules and procedures to guide actions and decisions?
a. Data
b. Information
c. Knowledge
d. All of the above.
Difficulty: Medium Reference: p. 240
23.
Data organized in such a manner as to render it useful and relevant to a problem solver in making decisions is referred to as:
a. Knowledge
b. Expertise
c. Information
d. Wisdom
Difficulty: Easy Reference: p. 240
24.
The ____________ perspective suggests that learning is a form of knowledge production and that knowledge is “manufactured” as well as acquired. Knowledge is seen as a set of stocks or inventories in which items are transferred from one stock to another based on process or external event.
a. Knowledge representation
b. Production
c. Knowledge states
d. None of the above.
Difficulty: Medium Reference: p. 241
25.
Which of the following is not a predominant knowledge perspective?
a. Representation
b. Analysis
c. Production
d. States
Difficulty: Easy Reference: p. 240
26.
According to van Lohuizen, which of the following is not a knowledge state?
a. Data
b. Insight
c. Intuition
d. Decision
Difficulty: Medium Reference: p. 241
27.
According to van Lohuizen, which of the following is not a knowledge state?
a. Structured information
b. Wisdom
c. Judgment
d. None of the above.
Difficulty: Hard Reference: p. 241
28.
According to Holsapple and Whinston, which of the following is a primary knowledge type?
a. Linguistic
b. Presentation
c. Procedural
d. None of the above.
Difficulty: Hard Reference: p. 242
29.
According to Holsapple and Whinston, which of the following is a secondary knowledge type?
a. Descriptive
b. Assimilative
c. Reasoning
d. None of the above.
Difficulty: Hard Reference: p. 242
30.
The process by which elicitation, gathering, organizing, and formalization of the knowledge of experts in a specific domain is conducted with the goal of transforming that knowledge into some computer-usable representation is called:
a. Knowledge inference.
b. Requirements determination.
c. Knowledge acquisition.
d. Performance modeling.
Difficulty: Easy Reference: p. 243
31.
According to Kim and Courtney, knowledge acquisition can be classified across which two dimensions?
a. Statistical, tactical
b. Operational, stochastic
c. Strategic, tacit
d. None of the above.
Difficulty: Hard Reference: p. 245
32.
The primary vehicle by which the information necessary to construct the performance model is gathered is through verbalization by the expert, often referred to as
a. political analysis.
b. knowledge engineering.
c. protocol analysis.
d. machine-driven learning.
Difficulty: Medium Reference: p. 248
33.
Which knowledge acquisition technique requires a significant amount of up-front planning?
a. Structured interviews
b. Unstructured interviews
c. General interviews
d. None of the above.
Difficulty: Easy Reference: p. 247
34.
When using the ___________ approach to KA, the expert encodes his or her own expertise and knowledge and enters it directly into the computer system. In this regard, the expert is serving two roles: expert and KE.
a. expert-driven
b. KE-driven
c. machine-driven
d. None of the above.
Difficulty: Easy Reference: p. 245
35.
_____________is that part of the evaluation process that focuses on the performance aspects of the knowledge base.
a. Verification
b. Efficiency
c. Validation
d. Criterion measurement
Difficulty: Easy Reference: p. 254
36.
_____________ is concerned with whether or not we built a system that performs with an acceptable level of competence and accuracy.
a. Verification
b. Efficiency
c. Validation
d. Criterion measurement
Difficulty: Medium Reference: p. 254
37.
Which of the following is not part of a preinterview checklist?
a. Decide what you need to know.
b. Determine the appropriate degree of structure for the interview.
c. Determine that an interview is the best method for obtaining this information.
d. All of the above are part of a preinterview checklist.
Difficulty: Easy Reference: p. 248
38.
Which of the following is a necessary task condition for successful concurrent protocols?
a. Each task must have a clearly defined conclusion.
b. The task must be able to be completed within two protocol sessions.
c. All data must be presented to the expert in a familiar form.
d. All of the above.
Difficulty: Hard Reference: p. 250
39.
The knowledge validation measure that defines how credible the knowledge is is referred to as:
a. depth.
b. breadth.
c. face validity.
d. robustness.
Difficulty: Hard Reference: p. 254
40.
The knowledge validation measure that defines the impact of changes in the knowledge base on the quality of the outputs is referred to as:
a. sensitivity.
b. appeal.
c. adaptability.
d. None of the above.
Difficulty: Hard Reference: p. 254
Essay Questions
41.
What are the three primary challenges to obtaining valid knowledge?
42.
Compare KE-driven KA with expert-driven KA. What are the advantages and disadvantages of each method?
69.
What are the primary functions of the task model?
70.
What are the benefits and limitations of the repertory grid method of knowledge gathering?
71.
Define validity and verification in the context of the knowledge base.
Chapter 9
Machines That Can Learn
True-False Questions
159.
Neural computing involves processing information by means of changing states of networks formed by interconnecting extremely large numbers of simple processing elements that interact with one another by exchanging signals.
Difficulty: Easy Reference: p. 260
160.
Fuzzy logic allows for the partial description of a rule.
Difficulty: Easy Reference: p. 261
161.
Fuzzy logic is key to developing computers that can think.
Difficulty: Easy Reference: p. 261
162.
The human language has evolved to allow for the conveyance of meaning through semantic approximation rather than precise content
Difficulty: Easy Reference: p. 261
163.
Fuzzy logic deals with the likelihood that something has a particular property while probability deals with the degree to which a particular property is present in something
Difficulty: Medium Reference: p. 261
164.
Fuzzy logic is a new development in the computing industry that emerged as a result of the development of Internet search engines.
Difficulty: Hard Reference: p. 262
165.
Fuzzy logic can deal with any degree of change in input.
Difficulty: Medium Reference: p. 262
166.
When continuous variables are involved, traditional rule-based systems tend to provide more accurate results than fuzzy logic.
Difficulty: Medium Reference: p. 264
167.
Fuzzy logic allows for the modeling of contradiction within a knowledge base.
Difficulty: Easy Reference: p. 265
168.
One of the limitations of a fuzzy logic system is that each rule is dependant upon all of the other rules in the knowledge base.
Difficulty: Medium Reference: p. 266
169.
Under highly complex situations, fuzzy logic rules are highly verifiable.
170.
Artificial neural networks are simple computer-based programs whose primary function is to construct models of a problem space based upon trial and error.
Difficulty: Easy Reference: p. 266
171.
The transmission of signals from one neuron to another in an artificial neural network occurs at the neural synapse via a complex chemical process in which specific substances, called neurotransmitters, are released from one side of the synaptic junction.
Difficulty: Medium Reference: pp. 266-267
172.
The ANN involves an interconnected system of nodes called neurodes that are associated with one or more weighted connections that are equivalent to human neural synapses, inside the memory of a digital computer. The construction of the ANN is one of multiple layers with the connections running between the layers.
Difficulty: Easy Reference: p. 267
173.
The basic structure a typical neurode consists of is a set of weighted input connections, a bias input, a state function, a nonlinear transfer function, and an output connection.
Difficulty: Medium Reference: p. 268
174.
The purpose of a state function is to consolidate the weights of the various inputs to the neurode into a single value that can be passed to the transfer function for processing.
Difficulty: Easy Reference: p. 269
175.
The primary purpose of the learning paradigm is to serve as the vehicle by which the summed information is passed on as output.
Difficulty: Medium Reference: p. 271
176.
An advantage of automated neural nets is the elimination of the need for direct input from experts.
Difficulty: Easy Reference: p. 273
177.
The GA’s smallest unit is called a chromosome. The chromosome represents the smallest unit of information in the problem domain and can be thought of as the basic building block for a possible solution.
Difficulty: Medium Reference: p. 276
178.
The GA’s smallest unit is called a gene. The gene represents the smallest unit of information in the problem domain and can be thought of as the basic building block for a possible solution.
Difficulty: Medium Reference: p. 276
Multiple Choice Questions
21.
______________ is a method of reasoning that allows for the partial description of a rule. Combining this approach to reasoning with the realm of digital processors has results in a class of computer applications that can “learn” from their mistakes and can “understand” the vagaries commonly found in human thought.
a. Backward propagation
b. Forward propagation
c. Fuzzy logic
d. Neural computing
Difficulty: Easy Reference: p. 261
22.
Which of the following is not true of fuzzy logic?
a. Fuzzy logic focuses on gradation.
b. Fuzzy logic utilizes precise distinction.
c. Fuzzy logic allows for the partial description of a rule.
d. None of the above.
Difficulty: Hard Reference: p. 261
23.
Which of the following is an advantage of fuzzy systems?
a. Allows for increased association amongst the rules of the system
b. Supports modeling of contradiction
c. Increase system verification capability
d. All of the above.
Difficulty: Hard Reference: p. 265
24.
Which of the following is a disadvantage of fuzzy systems?
a. Fuzzy systems decrease system autonomy.
b. Objects in a fuzzy system can belong to multiple sets.
c. Fuzzy systems lack memory.
d. All of the above.
Difficulty: Hard Reference: p. 265
25.
A simple computer-based program whose primary function is to construct models of a problem space based upon trial and error is called a(n):
a. artificial neural network.
b. genetic algorithm.
c. decision support system.
d. data warehouse.
Difficulty: Easy Reference: p. 266
26.
In the human brain, the transmission of signals from one neuron to another occurs at a junction referred to as the:
a. transmitters.
b. neurides.
c. neurodes.
d. synapses.
Difficulty: Easy Reference: p. 267
27.
The ANN involves an interconnected system of nodes called _________that are associated with one or more weighted connections that are equivalent to human neural synapses, inside the memory of a digital computer.
a. transmitters
b. neurides
c. neurodes
d. synapses
Difficulty: Medium Reference: p. 267
28.
Which of the following is part of the basic structure of a neurode?
a. Bias input
b. State function
c. Nonlinear transfer function
d. All of the above.
Difficulty: Easy Reference: p. 268
29.
The ANN layer that receives the data is referred to as the?
a. input layer.
b. output layer.
c. hidden layer.
d. neural layer.
Difficulty: Easy Reference: p. 267
30.
The ANN layer that relays the final results of the net is referred to as the:
a. input layer.
b. output layer.
c. hidden layer.
d. neural layer.
Difficulty: Easy Reference: p. 267
31.
The __________ in an ANN is where the processing and transformation of the input signal takes place and where the type of output signal is determined.
a. input layer
b. output layer
c. hidden layer
d. neural layer
Difficulty: Medium Reference: p. 267
32.
The _____________ is not normally connected to the ANN and is assumed to have an input value of 1.0 for the state function. Its purpose is to allow for the individual adjustment of the firing threshold of the neurode to facilitate the final adjustment of the ANN following the learning process.
a. input layer
b. bias input
c. state function
d. output connection
Difficulty: Medium Reference: pp. 268-269
33.
The __________________’s purpose is the consolidation of the weights of the various inputs to the neurode into a single value that can be passed to the transfer function for processing. The value obtained determines the degree of impact the combined inputs will have on the transfer function and, thus, on the final output of the neurode.
a. input layer
b. bias input
c. state function
d. output connection
Difficulty: Medium Reference: p. 269
34.
The function in an ANN which serves as the vehicle by which the summed information is passed on as output is called the:
a. transfer function.
b. state function.
c. memory function.
d. neural function.
Difficulty: Easy Reference: p. 269
35.
The actual procedure used by a neural network to find the appropriate weight settings is referred to as its:
a. transfer function.
b. state function.
c. weight seeking function.
d. learning paradigm.
Difficulty: Medium Reference: p. 271
36.
Which of the following is not a benefit derived from neural computing?
a. Reduced need for experts.
b. Allows for generalization from specific information content.
c. Highly verifiable, especially for complex problems.
d. All of the above are benefits.
Difficulty: Hard Reference: p. 273
37.
Which of the following are limitations of neural computing?
a. ANNs cannot explain inferences.
b. The repetitive training process is often time consuming.
c. Neural computing technologies push the limits of their hardware.
d. All of the above.
Difficulty: Easy Reference: p. 274
38.
A computer program that employs a set of adaptive processes that mimic the concept of “survival of the fittest” by regenerating recombinants of itself in response to a calculated difference between the network’s guess and the desired solution state is known as a:
a. neural network.
b. artificial life system.
c. genetic algorithm.
d. None of the above.
Difficulty: Medium Reference: p. 276
39.
In a genetic algorithm, the smallest unit of information in the problem domain is called a:
a. chromosome.
b. gene.
c. neuron.
d. synapse.
Difficulty: Easy Reference: p. 276
40.
Which of the following is not a genetic algorithm operational process?
a. Evaluation
b. Initialization
c. Mutation
d. None of the above.
Difficulty: Medium Reference: p. 277, 279
Essay Questions
41.
Define neural computing.
42.
Explain the similarities and the differences between fuzziness and probability.
72.
List the benefits of neural computing.
73.
List the limitations of neural computing.
74.
What is the primary advantage that Genetic Algorithms have over Artificial Neural Networks?
Chapter 10
The Data Warehouse
True-False Questions
179.
According to Inmon, a data warehouse is a subject-oriented, integrated database designed to support DSS functions where the data is volatile and relevant.
Difficulty: Medium Reference: p. 295
180.
A data warehouse is typically physically separated from transaction processing systems.
Difficulty: Easy Reference: p. 295
181.
Only a small fraction of the data that is captured, processed and stored in the enterprise is actually ever made available to executives and decision makers.
Difficulty: Easy Reference: p. 295
182.
The most common component of a data warehouse environment is the operational data store.
Difficulty: Easy Reference: p. 295
183.
A data mart is a subset of a data warehouse.
184.
The essence of the data warehouse concept is a recognition that the characteristics and usage patterns of operational systems used to automate business processes and those of a DSS are fundamentally similar and symbiotically linked.
Difficulty: Medium Reference: p. 295
185.
One difference between data warehouses and operational data stores is the presence of metadata.
Difficulty: Medium Reference: p. 297
186.
Metadata are data about data.
Difficulty: Easy Reference: p. 297
187.
Metadata are detailed data that has been aggregated and condensed into a more useful form.
Difficulty: Medium Reference: p. 297
188.
The very essence of the DW environment is that the data contained within the boundaries of the warehouse are integrated. This integration manifests itself through consistency in naming convention and measurement attributes, accuracy, and common aggregation.
Difficulty: Medium Reference: p. 299
189.
The time horizon for data in the data warehouse is typically significantly longer than operational data sores.
Difficulty: Easy Reference: p. 301
190.
One of the benefits of integrated data is the establishment of a common unit of measure for all synonymous data elements from dissimilar databases.
Difficulty: Easy Reference: p. 300
191.
According to Inmon, because data warehouses are highly de-normalized, they are highly redundant.
Difficulty: Medium Reference: p. 303
192.
One objective of the data warehouse environment is to minimize the impact on operational systems.
Difficulty: Easy Reference: p. 303
193. ��
The end user in a data warehouse environment deals directly with the application messaging layer.
Difficulty: Medium Reference: p. 305
194.
The process management layer in a data warehouse can be thought of as a scheduler.
Difficulty: Easy Reference: p. 305
195.
The processes needed to prepare the data to be loaded into a data warehouse are performed in the data staging layer.
Difficulty: Medium Reference: p. 305
196.
A data warehouse topology requires a centralized data warehouse that is accessed by one or more decision support tools.
Difficulty: Hard Reference: p. 306
197.
One of the most important factors in the development of a data warehouse is a comprehensive architectural framework.
Difficulty: Easy Reference: p. 313
198.
Transformation mapping metadata records how data from operational data stores and external sources are transformed on the way into the warehouse.
Difficulty: Medium Reference: p. 310
Multiple Choice Questions
21.
The most common component in the DW environment is the _____________. Its primary day-to-day function is to store the data for a single, specific set of operational applications.
a. data mart
b. data warehouse
c. operational data store
d. data staging tables
Difficulty: Easy Reference: p. 295
22.
Which of the following is not true of a data warehouse?
a. Implicit in its definition is that the data warehouse is physically separated from all other operational systems.
b. The data warehouse replaces the need for all other reporting systems within an organization.
c. The data warehouse holds aggregated data and atomic data for management.
d. None of the above.
Difficulty: Hard Reference: p. 295
23.
An alternative to the data warehouse concept is a lower-cost, scaled-down version referred to as a:
a. data mart.
b. metadata warehouse.
c. operational data store.
d. None of the above.
Difficulty: Easy Reference: p. 296
24.
Which of the following is not true of a data mart?
a. The data mart is often viewed as a way to gain entry into the realm of data warehouses and to make the mistakes on a smaller scale.
b. Vendors of data warehouse applications have found it easier to deal with a small group of isolated users than with the IS department of an entire organization.
c. The data mart is more efficient than a fully-developed data warehouse.
d. None of the above.
Difficulty: Hard Reference: p. 296
25.
Which of the following is not a characteristic of a data warehouse?
a. Data integrated
b. Volatile
c. Subject oriented
d. Time variant
Difficulty: Easy Reference: p. 298
26.
The essence of the data warehouse environment is that the data contained within the boundaries of the warehouse are _____________
a. integrated
b. consistent
c. streamlined
d. accurate
Difficulty: Easy Reference: p. 299
27.
The concept of time variant data implies which of the following statements?
a. Data are simply assumed to be accurate as of some moment in time and not necessarily right now.
b. Data are assumed to be accurate at the moment they were loaded into the data warehouse.
c. Data are assumed to vary over time.
d. Both a and b
Difficulty: Medium Reference: p. 301
28.
Which of the following activities would not normally be associated with a data warehouse?
a. Loading
b. Updating
c. Accessing
d. None of the above.
Difficulty: Medium Reference: p. 302
29.
The _______________________ represents the source data for the DW. This layer is comprised, primarily, of operational transaction processing systems and external secondary databases.
a. information access layer
b. operational and external layer
c. data access layer
d. process management layer
Difficulty: Easy Reference: p. 303
30.
Which layer of the data warehouse architecture does the end user deal directly with?
a. Data access layer
b. Application messaging layer
c. Information access layer
d. None of the above.
Difficulty: Medium Reference: p. 303
31.
The ______________ serves as a sort of interface or middleman between the operational and information access layers and the data warehouse itself. This layer spans the various databases contained within the DW and facilitates common access by the DW users.
a. data access layer
b. application messaging layer
c. information access layer
d. none of the above
Difficulty: Medium Reference: p. 304
32.
Which of the following would not be a good example of metadata?
a. the directory of where the data is stored
b. the rules used for summarization and scrubbing
c. where the operational data came from
d. all of the above are examples of metadata
Difficulty: Easy Reference: p. 307
33.
Which layer within the data warehouse architecture focuses on scheduling tasks that must be accomplished to build and maintain the data warehouse and data directory information?
a. data access layer
b. process management layer
c. application messaging layer
d. none of the above
Difficulty: Medium Reference: p. 305
34.
Which of the following is a valid data warehouse configuration?
a. Centralized data warehouse
b. Virtual data warehouse
c. Distributed data warehouse
d. All of the above.
Difficulty: Easy Reference: p. 306
35.
The _____________________ has to do with transporting information around the enterprise computing network. This layer is also referred to as the "middleware,” but it can typically involve more that just networking protocols and request routing.
a. application messaging layer
b. process management layer
c. data access layer
d. information access layer
Difficulty: Medium Reference: p. 305
36.
The ____________________ is where the actual data used for decision support throughout the organization are located.
a. information access layer
b. operational and external layer
c. physical data warehouse layer
d. process management layer
Difficulty: Medium Reference: p. 305
37.
The final component of the DWA is the __________________. This layer includes all of the processes necessary to select, edit, summarize, combine and load data warehouse and information access data from operational and/or external databases.
a. data staging layer
b. operational and external layer
c. physical data warehouse layer
d. process management layer
Difficulty: Medium Reference: p. 305
38.
The process that records how data from operational data stores and external sources are transformed on the way into the warehouse is referred to as:
a. summarization algorithms.
b. transformation mapping.
c. back propagation.
d. extraction history.
Difficulty: Medium Reference: p. 310
39.
The _____________________ applied to the detail data are of importance to any decision maker analyzing or interpreting the meaning of the summaries. These metadata can also save time by making it easier to decide which level of summarization is most appropriate for a given analysis context.
a. summarization algorithms
b. transformation mapping
c. back propagation
d. extraction history
Difficulty: Medium Reference: p. 311
40.
Whenever historical information is analyzed, meticulous update records must be kept. Often a decision maker will begin the process of constructing a time-based report by reviewing the ________________ because any changes to the business rules must be ascertained in order to apply the right rules to the right data.
a. summarization algorithms
b. transformation mapping
c. back propagation
d. extraction history
Difficulty: Medium Reference: pp. 310-311
Essay Questions
41.
What are the seven deadly sins of data warehouse implementation?
42.
What are the characteristics of a data warehouse?
75.
What is a data warehouse?
76.
List and explain the different layers in the data warehouse architecture.
77.
What are metadata? Why are they so important to a data warehouse?
Chapter 11
Data Mining and Data Visualization
True-False Questions
199.
Data mining is a set of activities used to find new, hidden, or unexpected patterns in data.
Difficulty: Easy Reference: p. 326
200.
A synonym for data mining is information sifting and discovery (ISD).
Difficulty: Easy Reference: p. 326
201.
Data mining is a business solution, not a technology.
Difficulty: Medium Reference: p. 327
202.
One of the primary reasons for the rise in data mining popularity is the ever-increasing volume of data that require processing.
Difficulty: Easy Reference: p. 328
203.
The broad category of software decision-making technology that enables multidimensional analysis is referred to as OLAP.
Difficulty: Easy Reference: p. 329
204.
ROLAP organizes and analyzes data as an n-dimensional cube. The ROLAP cube can be conceptually thought of as a common spreadsheet with two extensions: (1) support for multiple dimensions and (2) support for multiple concurrent users.
205.
One of the primary advantages of ROLAP versus MOLAP is it results in performance improvements for data access.
Difficulty: Hard Reference: p. 331
206.
MOLAP provides support for concurrent users.
Difficulty: Easy Reference: p. 331
207.
Sparcity can significantly increase the storage requirements of a MOLAP hypercube by requiring that space be allocated for all cells rather than just the ones that contain data values.
Difficulty: Medium Reference: p. 331
208.
MOLAP is well-suited to handle large numbers of detailed data.
Difficulty: Hard Reference: p. 331
209.
ROLAP databases typically contain both summary and detail data.
Difficulty: Medium Reference: p. 331
210.
The ROLAP structure contains a large number of normalized tables.
Difficulty: Medium Reference: p. 332
211.
The central table in a star schema is a dimension table.
Difficulty: Medium Reference: p. 332
212.
Data mining methods can be classified in two ways: by the function they perform or by their class of application.
Difficulty: Easy Reference: p. 333
213.
The classification approach to data mining searches all details or transactions from operational systems for patterns with a high probability of repetition.
Difficulty: Medium Reference: p. 333
214.
The association approach to data mining is intended to discover rules that define whether an item or event belongs to a particular subset of data.
Difficulty: Medium Reference: p. 333
215.
The sequencing approach to data mining relates events in time, based on a series of preceding events.
Difficulty: Medium Reference: p. 334
216.
The clustering approach to data mining is useful when there is a need to create partitions in order to discover patterns in the data.
Difficulty: Medium Reference: p. 335
217.
Data mining does not use statistical techniques because the complex patterns in data do not lend themselves to linear regression analysis.
Difficulty: Hard Reference: p. 336
218.
Two new categories of data mining are text mining and Web mining.
Difficulty: Easy Reference: p. 338
Multiple Choice Questions
21.
Which of the following is a synonym for data mining?
a. Knowledge data discovery
b. Information analysis
c. Coal mining
d. None of the above.
Difficulty: Easy Reference: p. 326
22.
Which of the following is not true of data mining?
a. Data mining has seen explosive growth in the area of customer relationship management.
b. Data mining is a business solution.
c. Data mining is a technology.
d. None of the above are true.
Difficulty: Hard Reference: p. 327
23.
The set of activities used to find new, hidden, or unexpected patterns in data is referred to as:
a. data warehousing.
b. data mining.
c. data transformation.
d. data aggregation.
Difficulty: Easy Reference: p. 326
24.
Which of the following is a reason for the growth in popularity of data mining?
a. Increased volume of data
b. Increased awareness of the inadequacy of the human brain to process multifactorial dependencies or correlations
c. Increased affordability of machine learning
d. All of the above.
Difficulty: Easy Reference: p. 328
25.
The term _________ has been generally agreed to represent the broad category of software technology that enables decision makers to conduct multidimensional analysis of consolidated enterprise data.
a. OLAP
b. MOLAP
c. ROLAP
d. None of the above.
Difficulty: Easy Reference: p. 329
26.
____________organizes and analyzes data as an n-dimensional cube. The cube can be thought of as a common spreadsheet with two extensions: (1) support for multiple dimensions and (2) support for multiple concurrent users.
a. OLAP
b. MOLAP
c. ROLAP
d. None of the above.
Difficulty: Easy Reference: p. 331
27.
In _____________, the multidimensional database server is replaced with a large relational database server. This “super” relational database will contain both detailed and summarized data thus allowing for “drill down” techniques to be applied to the data sets.
a. OLAP
b. MOLAP
c. ROLAP
d. None of the above.
Difficulty: Easy Reference: p. 331
28.
In a ________________, the data are stored as a multidimensional array where each cell in the array represents the intersection of all of the dimensions. Using this approach, any number of dimensions may be analyzed simultaneously and any number of multidimensional views of the data can be created.
a. hyperion cube
b. hypercube
c. stochastic cube
d. correlation cube
Difficulty: Medium Reference: p. 331
29.
Which term is used to refer to a basic database operation that links rows of two or more tables by one or more columns in each table?
a. n-cube analysis
b. table link
c. table join
d. None of the above.
Difficulty: Medium Reference: p. 331
30.
Which of the following is at the center of a star schema?
a. Multi dimensional cube
b. Dimension table
c. Fact table
d. None of the above.
Difficulty: Easy Reference: p. 332
31.
Which of the following is not considered one of the four major categories of processing algorithms and rule approaches?
a. Classification
b. Association
c. Sequence
d. Principal components analysis
Difficulty: Easy Reference: p. 333
32.
Which data mining technique utilizes linkage analysis to search operational transactions for patterns with a high probability of repetition?
a. Association
b. Cluster
c. Sequence
d. Principal components analysis
Difficulty: Medium Reference: p. 334
33.
There are some cases where it is difficult or impossible to define the parameters of a class of data to be analyzed. In these cases, _____________ methods can be used to create partitions so that all members of each set are similar according to some metric or set of metrics thus creating a set of objects grouped together by virtue of their similarity or proximity to each other.
a. association
b. linkage analysis
c. sequencing
d. clustering
Difficulty: Medium Reference: p. 335
34.
___________________ methods are used to relate events in time, such as the prediction of interest rate fluctuations or stock performance, based on a series of preceding events. Through this analysis, various hidden trends can be discovered that are often highly predictive of future events.
a. Association
b. Linkage analysis
c. Sequencing
d. Clustering
Difficulty: Medium Reference: p. 334
35.
Which of the following is not a data mining technology?
a. Statistical analysis
b. Neural networks
c. Decision trees
d. All of the above are data mining technologies.
Difficulty: Easy Reference: p. 336
36.
A common example of the use of association methods where a retailer can mine the data generated by a point-of-sale system, such as the price scanner you are familiar with at the grocery store is referred to as:
a. sequencing.
b. linkage analysis.
c. clustering.
d. market basket analysis.
Difficulty: Medium Reference: p. 334
37.
The process by which numerical data is converted into meaningful images is referred to as:
a. data mining.
b. data warehousing.
c. data visualization.
d. data aggregation.
Difficulty: Easy Reference: p. 351
38.
Which of the following is not an advantage of market basket analysis?
a. Identifying which products sell together can help manage inventory.
b. It is more preferable to marketers to market to existing customers.
c. Market basket analysis can sometimes produce results that are due to prior marketing campaigns.
d. All of the above are advantages.
Difficulty: Medium Reference: p. 345
39.
An orderly hierarchy of items and item categories that divides each item into a basket analysis is referred to as a:
a. cluster analysis.
b. taxonomy.
c. multi dimensional market basket analysis.
d. None of the above.
Difficulty: Hard Reference: p. 348
40.
Which of the following is a limitation of data mining?
a. Identification of missing data
b. Data noise
c. Missing values
d. All of the above.
Difficulty: Easy Reference: pps. 350-351
Essay Questions
41.
What are Codd’s twelve rules for OLAP?
42.
What are the current limitations and challenges to data mining?
78.
List and briefly describe several data mining technologies.
79.
Describe how relational on-line analytical processing (ROLAP) works.
80.
Explain the concept of multidimensional on-line analytical processing (MOLAP).
Chapter 12
Designing and Building the Data Warehouse
True-False Questions
219.
The first step in planning a data warehouse is to define the information requirements of the organization.
Difficulty: Easy Reference: p. 383
220.
The enterprise model consists of a number of separate models integrated together to provide a comprehensive view of the organization.
Difficulty: Easy Reference: p. 384
221.
The corporate process model describes the entities generated by the elementary processes carried out by the enterprise.
Difficulty: Easy Reference: p. 384
222.
The corporate data model represents a highly structured description of the elementary processes within the enterprise that identify the interrelationships among the different processes.
Difficulty: Easy Reference: p. 384
223.
The long term benefit of an enterprise data warehouse is the increased integration of business processes throughout the organization.
Difficulty: Medium Reference: p. 384
224.
A top-down data warehouse design focuses on making use of data available in the current operational systems.
Difficulty: Medium Reference: pp. 384-385
225.
A bottom-up approach to data warehouse brings more benefit to a data warehouse project than a top-down approach.
Difficulty: Medium Reference: p. 385
226.
Horizontal integration is the means by which the application designer ensures that the software application is congruent with the stated business requirements.
Difficulty: Medium Reference: p. 385
227.
Enterprise integration ensures that each application is fully integrated within its own boundaries.
Difficulty: Medium Reference: p. 385
228.
Vertical integration ensures that consistent data definitions occur across the entire organization.
Difficulty: Medium Reference: p. 386
229.
One of the most significant data warehouse critical success factors is strong management support.
Difficulty: Easy Reference: p. 386
230.
Organizational culture can have an impact on their readiness to develop a data warehouse because data warehouse development implies cross departmental cooperation and information sharing.
Difficulty: Medium Reference: p. 388
231.
One common approach to data warehouse project prioritization is to rank initiatives by impact on the information technology organization.
Difficulty: Medium Reference: p. 390
232.
One low cost approach to determining data warehouse feasibility is to develop a proof of concept.
Difficulty: Easy Reference: p. 391
233.
When the initial scope of a project continues to expand to incorporate new features this is referred to as feature expansion.
Difficulty: Medium Reference: p. 392
234.
The first step in developing a data warehouse is to determine the project scope.
Difficulty: Easy Reference: p. 392
235.
A project benefit that can be identified with certainty and expressed in dollars is said to be an intangible benefit.
Difficulty: Easy Reference: p. 396
236.
The ability to introduce new products would be considered an intangible project benefit.
Difficulty: Medium Reference: p. 396
237.
The ability to be proactive in identifying legal issues, thereby foregoing potential financial penalties that might impact a firm would be considered an intangible project benefit.
Difficulty: Hard Reference: p. 397
238.
Economic feasibility measures share one concept in common – the time value of money.
Difficulty: Medium Reference: p. 399
Multiple Choice Questions
21.
Which of the following data warehouse design approaches implies a strategic rather than operational perspective?
a. Bottom-up approach
b. Top-down approach
c. Central approach
d. None of the above.
Difficulty: Easy Reference: p. 384
22.
When the application designer ensures that the software application is in harmony with the business requirements, this is referred to as:
a. horizontal integration.
b. vertical integration.
c. enterprise integration.
d. None of the above.
Difficulty: Easy Reference: p. 385
23.
_________ seeks to ensure that each application under development is fully integrated within its own boundaries and to eliminate any inconsistencies in the final software product.
a. Horizontal integration
b. Vertical integration
c. Enterprise integration
d. None of the above.
Difficulty: Easy Reference: p. 385
24.
__________ ensures that there is consistent definition of data and processes across the organization.
a. Horizontal integration
b. Vertical integration
c. Enterprise integration
d. None of the above.
Difficulty: Easy Reference: p. 386
25.
Which of the following is not a data warehouse project readiness assessment factor?
a. Strong sponsorship
b. A compelling business motivation
c. An analytic organizational culture
d. All of the above are factors.
Difficulty: Medium Reference: pp. 386-388
26.
Which of the following is considered a key question to the success of a data warehouse initiative?
a. What are the key performance indicators used for each of the key business initiatives?
b. What is the potential impact on each of the existing performance metrics with improved access to higher-quality business process information?
c. What does management consider to be the key strategic business initiatives?
d. All of the above.
Difficulty: Easy Reference: p. 390
27.
Which of the following is considered to be a project prioritization dimension?
a. Perceived impact on the core business
b. Economic impact on the IT organization
c. Feasibility of staffing the project internally
d. All of the above.
Difficulty: Medium Reference: p. 390
28.
Which term refers to the process of developing a relatively low cost prototype to demonstrate that a data warehouse will achieve the perceived benefits?
a. Proof of prototype
b. Proof of concept
c. Proof of benefit
d. None of the above.
Difficulty: Easy Reference: p. 391
29.
__________ occurs when the initial scope of a project continues to expand as new features are incorporated into the project.
a. Feature creep
b. Hope creep
c. Scope creep
d. None of the above.
Difficulty: Easy Reference: p. 392
30.
Which of the following refers to a perspective from which an argument to pursue an investment can be made?
a. Faith
b. Fear
c. Facts
d. All of the above.
Difficulty: Easy Reference: p. 394
31.
Despite increased spending in information technology productivity growth in the U.S. has been stagnant or weak. This phenomenon is referred to as:
a. technology paradox.
b. productivity paradox.
c. productivity paradigm.
d. technology paradigm.
Difficulty: Easy Reference: p. 394
32.
A(n) ________ benefit can be identified with certainty and is easily expressed in dollars.
a. intangible
b. tangible
c. enterprise
d. None of the above.
Difficulty: Easy Reference: p. 396
33.
A(n) _________ benefit can be directly associated with a project but is not easily expressed in dollars.
a. intangible
b. tangible
c. enterprise
d. None of the above.
Difficulty: Easy Reference: p. 396
34.
Which of the following is not a tangible benefit?
a. Increase in process quality
b. Reduction in employee turnover
c. Improving time to market
d. Decreased need for travel
Difficulty: Hard Reference: p. 396
35.
Which of the following is not an intangible benefit?
a. Development of new markets
b. Increased competitive advantage
c. More timely information
d. Increased workplace safety
Difficulty: Hard Reference: p. 397
36.
Which of the following is an economic feasibility measure?
a. Net present value
b. Breakeven analysis
c. Internal rate of return
d. All of the above.
Difficulty: Easy Reference: p. 399
37.
Which economic feasibility measure results in a return on investment expressed as an interest rate?
a. Net present value
b. Breakeven analysis
c. Internal rate of return
d. All of the above.
Difficulty: Hard Reference: p. 402
38.
____________ determines the point where the benefits of a project equal its costs.
a. Net present value
b. Breakeven analysis
c. Internal rate of return
d. All of the above.
Difficulty: Medium Reference: p. 402
39.
Joining a fact table to dimension tables in a star schema is referred to as a:
a. star join.
b. data mart.
c. fact analysis.
d. dimensional warehouse.
Difficulty: Medium Reference: p. 407
40.
___________ determines exactly what constitutes a fact record.
a. Star schema
b. Degree of granularity
c. Data mart analysis
d. None of the above.
Difficulty: Easy Reference: p. 410
Essay Questions
41.
Describe the two main components of an enterprise model.
42.
Define three levels of enterprise integration.
81.
Distinguish between tangible and intangible benefits.
82.
What are the benefits realized through a sound data warehouse architecture?
83.
List the guidelines for a successful data warehouse project.
Chapter 13
Decisions in the Organization
True-False Questions
239.
A system can be defined as a series of interrelated elements with an identifiable boundary, that work together to achieve a common goal.
Difficulty: Easy Reference: p. 425
240.
The concept of synergy states that the whole is equal to the sum of the parts.
Difficulty: Easy Reference: p. 425
241.
A system contains three components: interrelated elements, internal inputs, and subsystems.
Difficulty: Easy Reference: p. 425
242.
Another name for a system element is a subsystem.
Difficulty: Easy Reference: p. 425
243.
Boundaries imply that systems can be distinguished via their relationship to other systems.
Difficulty: Medium Reference: p. 425
244.
Elements that are not contained within the boundary of a system are part of the system environment.
Difficulty: Medium Reference: p. 425
245.
The system environment is not part of the system itself.
Difficulty: Medium Reference: p. 425
246.
A self contained system that has very little interaction with the external environment is referred to as an adaptive system.
Difficulty: Medium Reference: p. 427
247.
Closed systems are perpetual and self-sustaining.
Difficulty: Easy Reference: p. 427
248.
Open systems adapt both internally and externally.
Difficulty: Easy Reference: p. 427
249.
Function composition is the process of breaking down systems into more discreet subsystems.
Difficulty: Easy Reference: p. 428
250.
A DSS is considered to be a closed system because all of the data stores used are self-contained.
Difficulty: Hard Reference: p. 430
251.
One of the advantages of a DSS is that the end-user is always contained with the boundaries of the system, resulting in greater system control.
Difficulty: Medium Reference: p. 430
252.
A service level agreement provides a detailed description of each service provision along with reporting requirements for each party to the agreement.
Difficulty: Easy Reference: p. 434
253.
Information relevance is synonymous with information precision.
Difficulty: Medium Reference: p. 436
254.
The standard for information to be considered timely is that it must be available to the user within 48 hours.
Difficulty: Medium Reference: p. 437
255.
Information consistency refers to how quickly and easily its intended user can figure out what to do with it.
Difficulty: Medium Reference: p. 438
256.
Information system architecture is a detailed plan that addresses the make, model and characteristics of each physical unit in a system.
Difficulty: Easy Reference: p. 440
257.
One of the unique features of a DSS is that the data is highly specialized and rarely used by anyone other than the person who created it.
Difficulty: Hard Reference: p. 440
258.
Scalability is the degree to which a platform can be expanded to accommodate increases in processing requirements.
Difficulty: Easy Reference: p. 440
Multiple Choice Questions
21.
Which of the following describes the term synergy?
a. The whole is greater than the sum of the parts.
b. The whole is equal to the sum of the parts.
c. A well defined DSS will result in performance improvements.
d. None of the above.
Difficulty: Easy Reference: p. 425
22.
Elements is a system are also referred to as:
a. models.
b. subsystems.
c. boundaries.
d. None of the above.
Difficulty: Easy Reference: p. 425
23.
_________ and ________ are common classifications of systems.
a. Internal, external
b. Inside, outside
c. Open, closed
d. None of the above.
Difficulty: Easy Reference: p. 426
24.
Which term best describes a mechanistic system?
a. Internal
b. External
c. Closed
d. Open
Difficulty: Medium Reference: p. 426
25.
Which term best describes an adaptive system?
a. Internal
b. External
c. Closed
d. Open
Difficulty: Medium Reference: p. 427
26.
Which type of system tends to be less structured in its operation?
a. Internal
b. External
c. Closed
d. Open
Difficulty: Easy Reference: p. 427
27.
The process of continually redefining a system into smaller, more discrete subsystems in referred to as:
a. system identification.
b. functional decomposition.
c. requirements definition.
d. None of the above.
Difficulty: Medium Reference: p. 428
28.
Which of the following is not true of a DSS?
a. A DSS is usually associated with more than one data store.
b. A DSS usually serves more end users than a typical transactional system.
c. A DSS can be controlled by its end users.
d. All of the above are true.
Difficulty: Hard Reference: p. 430
29.
Which of the following is not needed to define a DSS?
a. The objectives of the DSS application.
b. The definition of the data that resides within the boundaries of the DSS.
c. The definition of the temporal processes contained within the DSS.
d. All of the above are needed.
Difficulty: Easy Reference: p. 431
30.
Which of the following is true of a service level agreement?
a. It defines both the scope and level of service expected by the users of the service.
b. it includes a detailed description of each aspect of the service.
c. It identifies reporting obligations for all parties to the service.
d. All of the above.
Difficulty: Easy Reference: p. 434
31.
Which of the following is not a factor in determining information quality?
a. Relevance
b. Accuracy
c. Precision
d. None of the above.
Difficulty: Easy Reference: p. 436
32.
Which of the following is not a factor in determining information quality?
a. Usability
b. Cost
c. Correctness
d. None of the above.
Difficulty: Medium Reference: pp. 438-439
33.
Information that matches the needs of the decision maker is said to be:
a. timely.
b. accurate.
c. relevant.
d. precise.
Difficulty: Easy Reference: p. 435
34.
__________ refers to the maximum accuracy with which a piece of information can be represented.
a. Correctness
b. Precision
c. Consistency
d. None of the above.
Difficulty: Easy Reference: p. 436
35.
___________ is the degree to which similar pieces of information are stored and presented in a similar and predictable fashion.
a. Consistency
b. Precision
c. Accuracy
d. Relevance
Difficulty: Medium Reference: p. 438
36.
Which of the following is not an issue to be considered in the definition of DSS architecture?
a. Interoperability
b. Scalability
c. Compatibility
d. All of the above are issues to consider.
Difficulty: Easy Reference: p. 440
37.
Which of the following refers to the degree to which information can be delivered to the exact locus of a decision?
a. Interoperability
b. Compatibility
c. Scalability
d. None of the above.
Difficulty: Easy Reference: p. 440
38.
DSS _________ is a cost reduction issue, supporting the growth of a platform as system requirements change.
a. interoperability
b. compatibility
c. scalability
d. None of the above.
Difficulty: Medium Reference: p. 440
39.
The issue of ________ focuses on the degree to which a DSS under design will interact effectively with other organizational systems.
a. interoperability
b. compatibility
c. scalability
d. None of the above.
Difficulty: Medium Reference: p. 440
40.
Which of the following is included within a well-defined DSS architecture?
a. Databases
b. Models
c. Administration tools
d. All of the above.
Difficulty: Easy Reference: p. 442
Essay Questions
41.
List the elements of a well-defined DSS architecture.
42.
Briefly describe three issues that affect DSS information system architecture.
84.
Briefly define a system.
85.
Distinguish between a closed system and an open system.
86.
List 8 factors that affect information quality.
Chapter 14
Designing and Building Decision Support Systems
True-False Questions
259.
Because there is no one best DSS, it stands to reason that there is no one best way to design and build one either.
Difficulty: Easy Reference: p. 450
260.
Because of the unique requirements of a DSS, the only way to construct one is with a DSS generator.
Difficulty: Easy Reference: p. 450
261.
A DSS generator is an application system that eliminates the need for programming of thousands of individual instructions or codes in the design and construction of a DSS.
Difficulty: Easy Reference: p. 451
262.
A common perspective with regard to system design and development is found in the system development life cycle (SDLC) approach. The SDLC portrays the process as a series of iterative and recursive phases, each with its own set of required inputs, activities, and deliverables.
Difficulty: Easy Reference: p. 452
263.
The primary advantage of an SLDC approach to DSS design is that it is the most adaptive methodology to handle the sometimes rapidly changing system specifications.
Difficulty: Medium Reference: p. 453
264.
An alternative to the SDLC approach is ROMC Analysis. This approach focuses the analysis effort on developing understandings of read operations (R), overflows (O), memory maps (M), and continuous data flow (C).
Difficulty: Medium Reference: p. 453
265.
Functional category analysis results in the design of a DSS from the categorization of end-user interviews.
Difficulty: Medium Reference: p. 454
266.
Three primary categories of system requirements for the DSS can be established: (1) functional requirements, (2) interface requirements, and (3) coordination requirements.
Difficulty: Easy Reference: p. 457
267.
The functional requirements for the DSS focus on the DSS’s capacity for storage, recall, and production of knowledge useful to the problem context.
Difficulty: Medium Reference: p. 457
268.
The coordination requirements focus on the communication capabilities of the DSS. During this phase, the designer must determine the various channels and methods of communication that will be made available to the DSS user and the conditions under which they will be made available.
Difficulty: Medium Reference: p. 457
269.
The determination of specific physical components, structure, and development platforms is made during the system construction stage of the DSS development process.
Difficulty: Medium Reference: p. 457
270.
The goal of the system implementation phase is to test, evaluate, and deploy a fully functional and documented DSS. During this phase, a major activity is the final determination and evaluation of the degree to which the DSS meets the users’ needs.
Difficulty: Medium Reference: p. 458
271.
The DSS developer must possess the knowledge to develop the computer-based application but normally does not need to be knowledgeable about the details surrounding the problem under study.
Difficulty: Medium Reference: p. 459
272.
Two basic types of prototyping have proved effective in the development of DSSs: iterative prototypes and reusable prototypes.
Difficulty: Easy Reference: p. 460
273.
Prototyping can be beneficial in the development of a DSS because the immediate nature of user response and feedback regarding system functionality can result in greater senior management support.
Difficulty: Medium Reference: p. 461
274.
End users are those individuals who fall outside the confines of the formally defined IS department or function within an organization.
Difficulty: Easy Reference: p. 463
275.
An advantage of end-user development DSS applications is a reduction in time to deliver resulting in lower cost.
Difficulty: Medium Reference: p. 464
276.
An area of risk with end-user developed DSS applications is a potential lack of security measures built into the system.
277.
The concept of the information center (IC) arose to address the need for end-user support in the design and development of computer-based applications.
Difficulty: Easy Reference: p. 465
278.
DSS development tools are classified as either primary development tools or DSS generators.
Difficulty: Hard Reference: p. 466
Multiple Choice Questions
21.
An application system that eliminates the need for programming of thousands of individual instructions or code in the design and construction of a DSS is called a(n):
a. DSS development system.
b. DSS generator.
c. DSS analyzer.
d. None of the above.
Difficulty: Easy Reference: p. 451
22.
A common perspective with regard to system design and development is found in the _____________ approach which portrays the process as a series of iterative and recursive phases, each with its own set of required inputs, activities, and deliverables.
a. DSS programming language
b. ROMC
c. SDLC
d. None of the above.
Difficulty: Medium Reference: p. 452
23.
Which of the following is not true of the SDLC approach in DSS development?
a. It brings a necessary structure and discipline to the DSS development process.
b. It is flexible in its development approach.
c. It is common where formal relationships exist between the developer and end user.
d. All of the above are true.
Difficulty: Hard Reference: p. 453
24.
An alternative to the SDLC approach which focuses the analysis effort on developing understandings of representations, operations, memory aids, and controls is called:
a. SDLC II.
b. ROMC.
c. RAID.
d. CSF.
Difficulty: Easy Reference: p. 453
25.
A methodology for the design of a DSS that focuses on the identification of specific functions necessary for the development of a particular DSS from a broad list of available functions including selection, aggregation, estimation, simulation, equalization, and optimization is called:
a. functional category analysis.
b. ROMC.
c. SDLC.
d. SDLC II.
Difficulty: Easy Reference: p. 454
26.
Which of the following would not be considered a primary category of the systems analysis phase of DSS development?
a. Functional requirements
b. Interface requirements
c. Technical requirements
d. None of the above.
Difficulty: Hard Reference: p. 457
27.
The set of specifications for the DSS which focuses on the DSS’s capacity for storage, recall, and production of knowledge useful to the problem context is known as the:
a. functional requirements.
b. interface requirements.
c. technical requirements.
d. coordination requirements.
Difficulty: Medium Reference: p. 457
28.
The requirements which focus on the communication capabilities of the DSS are called the:
a. functional requirements.
b. interface requirements.
c. technical requirements.
d. coordination requirements.
Difficulty: Medium Reference: p. 457
29.
The requirements for a DSS that include the timing of events associated with the decision-making process, the facilitation of the access to relevant information, and the integration of various modeling tools contained with the DSS are called the:
a. functional requirements.
b. interface requirements.
c. technical requirements.
d. coordination requirements.
Difficulty: Medium Reference: p. 457
30.
Which design phase uses iterative prototyping to make refinements to the system based upon feedback received from testing and user involvement?
a. System design
b. System construction
c. Implementation
d. None of the above.
Difficulty: Easy Reference: pp. 457-458
31.
Which of the following would be an example of a coordination requirement?
a. The need to update sale projections for prior fiscal periods to actual figures before initiating a future projection process
b. The need to provide a graphic interface to the user
c. The need for a powerful server
d. None of the above.
Difficulty: Medium Reference: p. 457
32.
The determination of specific physical components, structure, and development platforms is made during the __________stage of the DSS development process.
a. system design
b. system requirements
c. system construction
d. implementation
Difficulty: Easy Reference: p. 457
33.
The goal of the _________________ phase is to test, evaluate, and deploy a fully functional and documented DSS. During this phase, a major activity is the final determination and evaluation of the degree to which the DSS meets the users’ needs.
a. system design
b. system construction
c. system implementation
d. incremental adaptation
Difficulty: Easy Reference: p. 458
34.
The final stage in the DSS development process is ________. It involves the continual revisiting of the activities from earlier stages in an effort to the capabilities of the DSS based upon the knowledge gained as a result of its use.
a. system requirements revision
b. system installation
c. system implementation
d. incremental adaptation
Difficulty: Medium Reference: p. 458
35.
Which of the following is true of the DSS development process?
a. More often than not the problem context is not known to the user.
b. The decision making process tends to vary greatly.
c. Prototyping is typically an expedient method of defining DSS requirements.
d. All of the above.
Difficulty: Hard Reference: p. 459
36.
Which of the following is not a prototyping classification?
a. Iterative
b. ROMC analyzed
c. Throwaway
d. All of the above are prototype classifications.
Difficulty: Medium Reference: p. 460
37.
Which of the following is true of prototyping?
a. It typically results in a lower development cost than an SDLC approach.
b. It typically results in a quicker development time than an SDLC approach.
c. In the early stages it is very similar to the SDLC approach.
d. All of the above.
Difficulty: Hard Reference: p. 461
38.
Which of the following is not true of an end-user developed DSS?
a. They are typically created in less time.
b. They typically have less implementation problems.
c. They typically result in lower development cost.
d. None of the above.
Difficulty: Medium Reference: p. 464
39.
The ___________________ are the lowest level of DSS development technology. In this category, we find the programming languages, code and text editors, graphics development applications, and database query mechanisms employed during the development of either a DSS generator or a specific DSS application.
a. primary development tools
b. DSS generators
c. specific DSS applications
d. None of the above.
Difficulty: Easy Reference: p. 467
40.
The _____________ are packages of hardware/software which provide a set of capabilities to build a specific DSS quickly and easily.
a. primary development tools
b. DSS generators
c. specific DSS applications
d. None of the above.
Difficulty: Easy Reference: p. 467
Essay Questions
41.
List the processes in the SDLC approach to DSS application development.
42.
Describe the functional category analysis approach. What is its most significant benefit?
87.
What are the strengths and weaknesses of the traditional SDLC approach?
88.
List and briefly describe the two types of prototypes. Compare their advantages and limitations.
89.
List the factors that are related to the quality of the user interface.
Chapter 15
Implementing and Integrating Decision Support Systems
True-False Questions
279.
Implementation is probably the most important and critical step in the entire DSS design process because without a successful implementation, the greatest DSS ever created will go unused or even unnoticed.
Difficulty: Easy Reference: p. 478
280.
Implementation is a static process, occurring at the end of DSS development.
Difficulty: Easy Reference: p. 479
281.
The Lewin-Schein theory of change is structured and rigid.
Difficulty: Easy Reference: p. 479
282.
The essence of the Kolb-Frohman model is the assumption that the probability of successful implementation will result from a specific pattern of actions by the users and managers.
Difficulty: Medium Reference: p. 479
283.
Alter suggested that the initial impetus behind the development of a DSS can be categorized via: (1) user stimulus, (2) managerial stimulus and (3) environmental stimulus.
Difficulty: Hard Reference: p. 481
284.
The Service with a Smile implementation pattern is the most common approach for a DSS.
Difficulty: Medium Reference: p. 482
285.
The logic behind user satisfaction as a measure of success is that the users will view a DSS as favorable if it is perceived to be effective in supporting the decision-making process. The more effective the system appears to be, the more satisfied the users will be with the system.
Difficulty: Easy Reference: p. 485
286.
The number of times a DSS was accessed is the most effective metric of its success.
Difficulty: Hard Reference: p. 485
287.
Davis developed a method of measuring user satisfaction of information systems based upon perceived usefulness and perceived ease of use.
Difficulty: Easy Reference: p. 485
288.
Perceived usefulness focuses on the attitudes of the user with regard to the degree to which the system is perceived to bring utility or value to the activity within which it is used.
Difficulty: Medium Reference: p. 485
289.
Perceived ease-of-use focuses on the degree to which the users of the system perceive the task to be easy to do.
Difficulty: Medium Reference: p. 485
290.
One method of assessing the success of a DSS is to focus on the technical functionality of the system.
Difficulty: Easy Reference: p. 486
291.
Utilizing the ratio of direct cost to direct benefit is an example of using organizational success measures to assess a DSS.
Difficulty: Easy Reference: p. 486
292.
Integrating the DSS into the organization simply means that the new application is merged into the existing computing infrastructure such that the appearance of a seamless architecture appears to the user.
Difficulty: Medium Reference: p. 494
293.
In functional integration, the various decision support functions with the DSS are integrated and linked to those of the existing infrastructure. This linking includes providing common menu access, inter- and intra-application transfer of data and tools, and a common application interface at the same desktop client or workstation.
Difficulty: Medium Reference: p. 494
294.
Physical integration involves the architectural bundling of the hardware, software, and data communication characteristics associated with the new DSS into the existing set of physical systems.
Difficulty: Easy Reference: p. 494
295.
Physical integration can begin before a DSS is designed.
Difficulty: Medium Reference: p. 494
296.
One of the least common problems faced during the implementation and integration of virtually any computer-based information system, including DSS, is the resistance by certain individuals or groups to the changes associated with the new system.
Difficulty: Medium Reference: p. 495
297.
Resistance to change can result from a number of different factors, including fear of the unknown.
Difficulty: Easy Reference: p. 495
298.
Managers represent the single resistance group to the implementation of a DSS, because they fear a loss of importance.
Difficulty: Medium Reference: p. 497
Multiple Choice Questions
21.
_________________ is probably the most important and critical step in the entire DSS design process because without its success, the greatest DSS ever created will go unused or even unnoticed.
a. Design
b. Implementation
c. Requirements Analysis
d. Physical Design
Difficulty: Easy Reference: p. 478
22.
According to this theory, the process of change occurs in three basic steps: unfreezing, moving, and refreezing.
a. Kolb-Frohman
b. Structuration
c. Contingency
d. Lewin-Schein
Difficulty: Easy Reference: p. 479
23.
Which of the following is not a step in the Kolb-Frohman theory of change?
a. Scouting
b. Entry
c. Diagnosis
d. Refreezing
Difficulty: Medium Reference: p. 481
24.
According to Alter, which of the following is not a DSS development category impetus?
a. Entrepreneurial stimulus
b. User stimulus
c. Managerial stimulus
d. Environmental stimulus
Difficulty: Medium Reference: p. 481
25.
One common measure of success suggests that users will view a DSS as favorable if it is seen as effective in supporting the decision-making process. This measure is known as:
a. perceived usefulness.
b. perceived ease of use.
c. user satisfaction.
d. system use.
Difficulty: Medium Reference: p. 485
26.
The ________________ construct focuses on the attitudes of the user with regard to the degree to which the system is perceived to bring utility or value to the activity within which it is used.
a. perceived usefulness
b. perceived ease-of-use
c. user satisfaction
d. system use
Difficulty: Medium Reference: p. 485
27.
The ________________ construct focuses on the degree to which the users of the system perceive the tool to be easy to use.
a. perceived usefulness
b. perceived ease-of-use
c. user satisfaction
d. system use
Difficulty: Medium Reference: p. 485
28.
Which DSS implementation pattern is associated with high levels of user involvement and initiation?
a. Join hands and circle around
b. Service with a smile
c. R&D
d. Used car salesperson
Difficulty: Hard Reference: p. 482
29.
Which DSS implementation pattern is characterized by a consultant attempting to sell the need for a DSS to the user?
a. Join hands and circle around
b. Service with a smile
c. R&D
d. Used car salesperson
Difficulty: Easy Reference: p. 483
30.
Which DSS implementation pattern is associated with users who are looking to buy a product?
a. Join hands and circle around
b. Service with a smile
c. R&D
d. Used car salesperson
Difficulty: Easy Reference: p. 482
31.
Which of the following is not a criterion for DSS success?
a. Fits well with the organization’s planning methods.
b. Fits well with the political approach to decision making within the organization.
c. Is considered both cost effective and valuable relative to its development costs.
d. All of the above are DSS success criteria.
Difficulty: Easy Reference: p. 487
32.
In this system measurement category, the quality of the computer system becomes the focus. Issues such as response time, system availability, usage time, reliability, and quality of system support, among others are identified and measured. Measures in this category can be obtained using a variety of methods including direct observation, event logging, and attitude or perceptual construct surveys.
a. System performance
b. Task performance
c. Business opportunities
d. Evolutionary aspects
Difficulty: Easy Reference: p. 487
33.
This category of assessment takes a micro focus on performance and addresses issues related to the functionality of the DSS within the specific problem context for which it was developed. Decision quality can be assessed in terms of time spent in the decision process, number of alternatives evaluated, and span of information searched. Additionally, qualitative measures dealing with trust or confidence, satisfaction, and understanding, can also be included in this measure.
a. System performance
b. Task performance
c. Business opportunities
d. Evolutionary aspects
Difficulty: Medium Reference: p. 488
34.
This category measures the factors that contribute to the organizational aspects of the DSS. This category is primarily quantitative in nature and includes measures focusing on increases in revenue, cost reductions, increases in training effectiveness, increases in competitive advantages, and changes in productivity, among many others.
a. System performance
b. Task performance
c. Business opportunities
d. Evolutionary aspects
Difficulty: Medium Reference: p. 488
35.
The degree to which the DSS adapts to changes within the problem context and environment is the focus of this category of performance measurement. Inherent in providing support to ill-structured decisions and problem-solving tasks are the changes that can occur in the users’ decision-making behavior, problem characteristics, and circumstances. The ability of a DSS to adapt to these dynamics is often a function of the original development tool selected and the ability of the user to make necessary changes to data or models.
a. System performance
b. Task performance
c. Business opportunities
d. Evolutionary aspects
Difficulty: Medium Reference: p. 488
36.
Which of the following takes a process-centric perspective with regard to the design of an information system and its associated applications?
a. DSS management
b. Issue-based management
c. Process based management
d. None of the above.
Difficulty: Hard Reference: p. 489
37.
The process by which the new DSS application is merged into the existing computing infrastructure such that the appearance of a seamless architecture appears to the user is called:
a. design.
b. maintenance.
c. implementation.
d. integration.
Difficulty: Easy Reference: p. 494
38.
In __________ integration, the various decision support functions with the DSS are integrated and linked to those of the existing infrastructure. This linking includes providing common menu access, inter- and intra-application transfer of data and tools, and a common application interface at the same desktop client or workstation.
a. physical
b. functional
c. technical
d. None of the above.
Difficulty: Medium Reference: p. 494
39.
_________________ integration involves the architectural bundling of the hardware, software, and data communication characteristics associated with the new DSS into the existing set of physical systems.
a. Physical
b. Functional
c. Technical
d. None of the above.
Difficulty: Medium Reference: p. 494
40.
Which of the following is a factor that can lead to resistance to change within an organization?
a. Fear of the unknown
b. Differing perceptions
c. Conservationism
d. All of the above.
Difficulty: Easy Reference: p. 496
Essay Questions
41.
Define the Lewin-Schein Change Theory.
1.
42.
What are the seven steps of the process of change in the Kolb-Frohman Model?
90.
List and briefly describe the six generic DSS implementation patterns.
91.
List seven characteristics of overall software quality.
92.
Identify the factors that cause organizational resistance to change.
Chapter 16
Creative Decision Making and Problem Solving
True-False Questions
299.
Creativity involves the translation of our unique gifts, talents, and vision into some form of external reality that is both new and useful.
Difficulty: Easy Reference: p. 504
300.
Creativity can involve the combining of existing objects intended for one purpose into some other completely different purpose.
Difficulty: Easy Reference: p. 504
301.
Intelligence combines thinking and learning.
Difficulty: Easy Reference: p. 505
302.
The psychoanalytic perspective maintains that creativity is a preconscious mental activity. In other words, creative thinking occurs in our subconscious thoughts and, as such, is not directly accessible to our conscious thoughts.
Difficulty: Easy Reference: p. 508
303.
Creativity in problem solving and planning can be defined as the ability of a subject in a choice situation to modify self-imposed constraints so as to enable him to select courses of action that he would otherwise produce on his own.
Difficulty: Medium Reference: p. 506
304.
Scheduling creativity requires a highly skilled information technology project manager.
Difficulty: Hard Reference: p. 507
305.
The psychoanalytic perspective argues that creativity is nothing more than a natural response to stimuli within our individual environments and that certain combinations of stimuli can lead to more creative behavior than other combinations.
Difficulty: Medium Reference: p. 508
306.
The process orientation view sees creativity as a property of a thought process that can be acquired and improved through instruction and practice.
Difficulty: Medium Reference: p. 508
307.
Logical thinking is perhaps the most common, most widely used, and most often recommended approach to solving a problem. This method of thinking is rooted in the model-building and quantitative methods of management science and is an integral part of the design and development of a computer-based DSS.
Difficulty: Easy Reference: p. 509
308.
Lateral thinking is based upon the premise that the human mind naturally processes and stores information in accordance with a specific pattern of thought and action. Because of this logical categorization process, the mind becomes hindered in any attempt to change these recognized patterns of thought. Lateral thinking disrupts these patterns through the introduction of discontinuity.
Difficulty: �� Medium Reference: p. 509
309.
Three major activities promote lateral thinking processes: (1) creativity, (2) analysis and (3) initiative.
Difficulty: Medium Reference: p. 509
310.
Exaggeration can be used as a method of change.
Difficulty: Hard Reference: p. 510
311.
The most common method of introducing change from outside the problem context is to use analogies.
Difficulty: Medium Reference: p. 510
312.
Opposite thinking takes the position that certain elements within a problem context are more critical to any solution outcome.
Difficulty: Medium Reference: p. 511
313.
Critical thinking is a method of problem solving where the decision-maker simply takes the perspective of someone other than himself or herself. This is a form of “standing in another’s shoes.” Using this method, a decision maker can often gain insight into why a particular problem exists in the first place.
Difficulty: Medium Reference: p. 511
314.
One of the most common barriers to creativity is a result of problem solvers making assumptions regarding potential outcomes that are untrue.
Difficulty: Medium Reference: p. 513
315.
Creative thought can be inhibited by criticism.
Difficulty: Easy Reference: p. 514
316.
The vast majority of creative problem-solving techniques applicable in an electronic decision support mechanism can be categorized into an easily manageable taxonomy consisting of four basic categories: free association, structured relationships, group techniques, and serendipity.
Difficulty: Easy Reference: p. 515
317.
Osborn’s Idea Checklist requires that users write down attributes of a problem, list as many alternatives under each attribute as possible, and then consider all possible combinations.
Difficulty: Hard Reference: p. 518
318.
AHP is a mathematically based theory for use in decision making.
Difficulty: Easy Reference: p. 521
Multiple Choice Questions
21.
Which of the following is not a characteristic of creativity?
a. Intelligence
b. Academic achievement
c. Intuition
d. All of the above.
Difficulty: Hard Reference: p. 505
22.
Which of the following statements is true of creativity?
a. A creative person does things never done before.
b. Creativity involves the translation of unique gifts, talents and vision into some form of external reality that is new and useful.
c. Creativity can involve combining objects intended for one purpose into a completely different purpose.
d. All of the above.
Difficulty: Easy Reference: p. 504
23.
The _____________ perspective maintains that creativity is a preconscious mental activity. In other words, creative thinking occurs in our subconscious thoughts and, as such, is not directly accessible to our conscious thoughts.
a. psychoanalytic
b. behavioral
c. process orientation
d. None of the above.
Difficulty: Medium Reference: p. 508
24.
The _______________ perspective argues that creativity is nothing more than a natural response to stimuli within our individual environments and that certain combinations of stimuli can lead to more creative behavior than other combinations.
a. psychoanalytic
b. behavioral
c. process orientation
d. None of the above.
Difficulty: Medium Reference: p. 508
25.
The __________________perspective sees creativity as a property of a thought process that can be acquired and improved through instruction and practice.
a. psychoanalytic
b. behavioral
c. process orientation
d. None of the above.
Difficulty: Medium Reference: p. 508
26.
Which of the following is not considered one of the five basic categories of ways of thinking?
a. Logical
b. Lateral
c. Critical
d. Intuition
Difficulty: Easy Reference: p. 509
27.
This method of thinking is rooted in the model-building and quantitative methods of management science and is an integral part of the design and development of a computer-based DSS.
a. Logical
b. Lateral
c. Critical
d. Intuition
Difficulty: Medium Reference: p. 509
28.
This method of thinking is based upon the premise that the human mind naturally processes and stores information in accordance with a specific pattern of thought and action.
a. Logical
b. Lateral
c. Critical
d. Intuition
Difficulty: Medium Reference: p. 509
29.
This method of thinking takes the position that there exists certain elements within a problem context that are most crucial to the significance of any solution outcome.
a. Logical
b. Lateral
c. Critical
d. Intuition
Difficulty: Medium Reference: p. 511
30.
______________ thinking is a method of problem solving where the decision-maker simply takes the perspective of someone other than himself or herself. This is a form of “standing in another’s shoes.” Using this method, a decision maker can often gain insight into why a particular problem exists in the first place.
a. Lateral
b. Opposite
c. Intuition
d. None of the above.
Difficulty: Medium Reference: p. 511
31.
Which of the following is not a major activity available to promote lateral thinking?
a. Evaluation
b. Alternatives
c. Provocation
d. None of the above.
Difficulty: Medium Reference: p. 509
32.
Which of the following is not a characteristic of a vertical thinking process?
a. Guarantees that at least a minimally acceptable solution will be found.
b. Focuses primarily on the obvious and tends to process using established patterns of thought.
c. Chance intrusions are welcomed and nothing is considered irrelevant.
d. All of the above are characteristics of vertical thinking.
Difficulty: Hard Reference: p. 509
33.
Which of the following is not a barrier to creativity?
a. Self-constraining beliefs
b. Fear of criticism
c. lack of confidence
d. None of the above.
Difficulty: Easy Reference: pp. 513-514
34.
__________ is one of the most common barriers to creativity and is identified by problem solvers who make assumptions regarding potential outcomes that are fabricated or untrue.
a. Self-constraining beliefs
b. Fear of criticism
c. Lack of confidence
d. Stress
Difficulty: Easy Reference: p. 513
35.
Which of the following is untrue of barriers to creativity?
a. Not all barriers to creativity are self-imposed.
b. Environments in which quick production of thought is the norm enhance creativity.
c. Lack of introspection can be a barrier to creativity.
d. All of the above.
Difficulty: Hard Reference: p. 515
36.
Which of the following is major category of problem-solving techniques?
a. Free association
b. Serendipity
c. Group techniques
d. All of the above.
Difficulty: Easy Reference: p. 515
37.
Which category of problem solving techniques contains two goals: (1) divergent thinking and (2) the generation of ideas?
a. Serendipity
b. Free association
c. Brainstorming
d. None of the above.
Difficulty: Medium Reference: p. 516
38.
Which of the following is true of brainstorming?
a. It can be facilitated in a structured manner.
b. It can be facilitated in an unstructured manner.
c. It can be conducted individually or collectively.
d. All of the above.
Difficulty: Easy Reference: p. 517
39.
The _________ technique requires the user to write down attributes of a problem, list as many alternative options under each attribute as possible, and then consider all possible combinations and permutations of the alternatives.
a. Osborn’s idea checklist
b. morphological forced connections
c. analytic hierarchy process
d. None of the above.
Difficulty: Medium Reference: p. 518
40.
Which of the following is not an element of the general form of the model for the Analytic Hierarchy Process?
a. Criteria
b. Alternatives
c. Decision
d. All of the above are elements.
Difficulty: Easy Reference: p. 520
Essay Questions
41.
What approaches can be utilized to provoke changes in lateral thinking?
42.
List the steps involved in Nominal Group Technique.
93.
Describe the basis of lateral thinking.
94.
List and briefly describe the three major activities in promoting lateral thinking processes.
95.
What is creativity? Explain it from different perspectives.
Chapter 17
Intelligent Software Agents, BOTS, Delegation, and Agency
True-False Questions
319.
Delegation involves the discretionary authority to autonomously act on behalf of another.
Difficulty: Easy Reference: p. 530
320.
An autonomous agent takes on the responsibility of completing a task that is delegated to you.
Difficulty: Easy Reference: p. 530
321.
Delegation enables you to take on more responsibility
Difficulty: Easy Reference: p. 530
322.
Information systems enable time-consuming activities to be accomplished in a more expedient manner only when delegated to subordinate employees
Difficulty: Easy Reference: p. 531
323.
The concept of the computer responding to human intervention is referred to as indirect manipulation.
Difficulty: Easy Reference: p. 531
324.
Intelligent software agents act autonomously on behalf of the user.
Difficulty: Easy Reference: p. 531
325.
Intelligent software agents replace the need for any human intervention.
Difficulty: Medium Reference: p. 531
326.
The concept of delegacy centers on consistency.
Difficulty: Medium Reference: p. 531
327.
Intelligent software agents on the Internet and intranets are moving towards personalization and diversification.
Difficulty: Easy Reference: p. 533
328.
The concept of agency consists of techniques, concepts, and applications to personalize, customize, elaborate, delegate, and catalyze the processes in the online marketplace.
Difficulty: Medium Reference: p. 535
329.
Supplier-driven agency relies primarily on pull technologies.
Difficulty: Medium Reference: p. 535
330.
A user-driven agency enables an end-user to be able to utilize push technologies to customize their information needs.
Difficulty: Medium Reference: p. 535
331.
Agency architecture defines the mathematical formulas for representing and reasoning about the properties of agents.
Difficulty: Medium Reference: p. 537
332.
Autonomy is the characteristic of an agent that acquires information necessary to function by monitoring the user’s actions.
Difficulty: Medium Reference: p. 540
333.
Anthropomorphism is the embodiment of a principle, attitude, or view of life.
Difficulty: Medium Reference: p. 541
334.
Because of the static nature of intelligent agents, many are needed to develop an effective e-commerce site.
Difficulty: Hard Reference: p. 541
335.
Organizational agents are far more prevalent across the Internet than personal agents.
Difficulty: Medium Reference: p. 544
336.
A watcher agent learns from a user’s past behavior.
Difficulty: Medium Reference: p. 546
337.
A helper agent is designed to assist a user in an autonomous manner without human intervention.
Difficulty: Medium Reference: p. 547
338.
Consumer recommendations can be presented to people through the use of automated collaboration filtering.
Difficulty: Easy Reference: p. 551
Multiple Choice Questions
21.
When you agree to take on the responsibility for completing a task from another, you act as a(n) _____________.
a. delegate
b. independent agent
c. autonomous agent
d. None of the above.
Difficulty: Easy Reference: p. 530
22.
Software that “knows” a users’ interests and can act autonomously on their behalf is referred to as:
a. an intelligent agent.
b. a script file.
c. artificial intelligence.
d. All of the above.
Difficulty: Easy Reference: p. 531
23.
Which of the following is true of software agents?
a. They can be personalized to meet a users’ needs.
b. They operate as background tasks.
c. There are many different types of software agents.
d. All of the above.
Difficulty: Easy Reference: p. 533
24.
Which of the following is not an agency type?
a. Supplier-driven agency
b. User-driven agency
c. Market-driven agency
d. All of the above are agency types.
Difficulty: Medium Reference: p. 535
25.
Which of the following is not true of an agency?
a. It consists of techniques, concepts and applications to personalize processes.
b. It influences the content that it presents.
c. They can be categorized as organizational or personal.
d. All of the above are true.
Difficulty: Hard Reference: p. 535
26.
_________ answers the question of what an agent is, as well as the mathematical formalisms for representing and reasoning about the properties of agents.
a. Agent theory
b. Agent architecture
c. Agent Language
d. None of the above.
Difficulty: Easy Reference: p. 537
27.
_________ focuses on the development and deployment of software languages for programming and experimenting with intelligent software agents.
a. Agent theory
b. Agent architecture
c. Agent language
d. None of the above.
Difficulty: Easy Reference: p. 537
28.
__________ addresses the problem of designing hardware and software systems that will satisfy the properties specified by the agent theorists.
a. Agent theory
b. Agent architecture
c. Agent language
d. None of the above.
Difficulty: Easy Reference: p. 537
29.
Which types of agents represents two orthogonal concepts: the ability for autonomous execution and the ability to perform domain-oriented reasoning?
a. AIMA
b. MuBOT
c. Hayes-Roth
d. None of the above.
Difficulty: Hard Reference: p. 539
30.
Which types of agents collaborate, are autonomous, trustworthy and degrade gracefully in the face of a communications mismatch?
a. SodaBot
b. IBM
c. KidSim
d. None of the above.
Difficulty: Hard Reference: p. 539
31.
Which types of agents are computational systems that inhabit some complex dynamic environment and act autonomously, and by doing so realize a set of goals for which they are designed?
a. Maes
b. Foner
c. Wooldridge-Jennings
d. FAQ
Difficulty: Hard Reference: p. 539
32.
Which of the following is not a common characteristic of intelligent agents?
a. Autonomy
b. Anthropomorphism
c. Risk and trust
d. All of the above are common characteristics.
Difficulty: Easy Reference: p. 540
33.
_________ is the ascription of humanlike characteristics to an otherwise non-human entity.
a. Personalizability
b. Discourse
c. Anthropomorphism
d. None of the above.
Difficulty: Medium Reference: p. 541
34.
A(n) _______ is defined as an embodiment or concrete manifestation of a principle, attitude, view of life, or the like.
a. personalizability
b. discourse
c. anthropomorphism
d. None of the above.
Difficulty: Medium Reference: p. 541
35.
Which of the following is an advantage of a transportable agent?
a. Customization
b. Fault tolerance
c. Efficiency
d. All of the above.
Difficulty: Easy Reference: p. 542
36.
Which of the following is not a classification of Brustoloni’s taxonomy of software agents?
a. Planning agent
b. Regulation agent
c. Mobility agent
d. Adaptive agent
Difficulty: Medium Reference: p. 544
37.
Which type of agent searches for the emergence of specific information?
a. Learning agent
b. Watcher agent
c. Passive agent
d. None of the above.
Difficulty: Easy Reference: p. 546
38.
Which type of agent is designed to facilitate and assist with online shopping activities?
a. Helper agent
b. Shopping agent
c. Watcher agent
d. Learning agent
Difficulty: Easy Reference: p. 547
39.
Which of the following is not an attribute role of agents within the Gaia methodology?
a. Permissions
b. Protocols
c. Use cases
d. Activities
Difficulty: Medium Reference: p. 558
40.
Which of the following is used by UML to model the world as relations between entities using static class diagram format?
a. Protocol diagram
b. Architecture diagram
c. Ontology diagram
d. None of the above.
Difficulty: Medium Reference: p. 561
Essay Questions
41.
Provide a definition for Intelligent Software Agent.
42.
Distinguish between a watcher agent and a learning agent.
96.
List and describe the common characteristics of Intelligent Software Agents.
97.
Define the classifications of agents within Brustoloni’s Taxonomy of Software Agents?
98.
List the twelve Intelligent Software Agent accessibility guidelines.
Chapter 18
Decision Support in the Twenty-First Century
True-False Questions
1.
Decision support systems continue to increase in importance as a result of rapid increases in the amount of data to be filtered and analyzed.
Difficulty: Easy Reference: p. 576
2.
A major problem in the development of DSSs is a lack of GUIs to help integrate disparate architectures or platforms.
Difficulty: Easy Reference: p. 576
3.
One of the significant advantages of DSSs is that they are completely secure and can therefore be accessed across any network.
Difficulty: Easy Reference: p. 577
4.
One area of future DSS growth is advanced data management capabilities, including support for hypertext and multimedia.
Difficulty: Easy Reference: p. 577
5.
Virtual reality can potentially alter the manner in which users are trained to use information systems.
Difficulty: Medium Reference: p. 578
6.
Two major issues that will impact the future of expert systems are knowledge management and virtual databases.
Difficulty: Medium Reference: p. 578
7.
A high performance storage system (HPSS) is software that is useful for the management of large rule sets.
Difficulty: Medium Reference: p. 579
8.
The ultimate design goal for expert system knowledge acquisition is to enable the user to encode their own knowledge.
Difficulty: Easy Reference: p. 580
9.
Virtual information access and analysis provides a comprehensive access to multimedia, graphical and text data but is limited to internal data.
Difficulty: Hard Reference: p. 581
10.
Collaborative filtering applies human thought, in the form of a database of user preferences.
Difficulty: Medium Reference: p. 583
Multiple Choice Questions
11.
DSSs have impacted which of the following areas?
a. Medicine
b. Manufacturing
c. Forestry
d. All of the above.
Difficulty: Easy Reference: p. 575
12.
_____________ is the term that describes the phenomena of data doubling every year, while at the same time a typical knowledge analyst can only absorb 5% of the data.
a. Online analytical processing
b. Information overload
c. Virtual information analysis
d. None of the above.
Difficulty: Medium Reference: p. 576
13.
Which of the following enables individuals to immerse themselves into a simulated environment?
a. Environmental analysis
b. Virtual analysis
c. Virtual reality
d. None of the above.
Difficulty: Easy Reference: p. 577
14.
Which of the following is not an issue that is crucial to the future of expert systems?
a. Knowledge management
b. Network simulation
c. AI requirements for intelligent databases
d. None of the above.
Difficulty: Medium Reference: p. 578
15.
Which of the following is true of a high-performance storage system (HPSS)?
a. An HPSS is software that provides hierarchical storage management.
b. An HPSS supports scalability.
c. A goal of an HPSS is to move files at speeds significantly faster than today’s current storage technology.
d. All of the above.
Difficulty: Medium Reference: p. 579
16.
Which of the following is true of knowledge management?
a. Knowledge management involves the codification of thoughts and experiences.
b. The goal of a knowledge management system is to allow the expert to encode their own knowledge directly into the system.
c. Knowledge management supports multiple problem context generalization.
d. All of the above.
Difficulty: Easy Reference: p. 580
17.
_________ provides access to both organizational and external information through visual screens that combine text, data, and images.
a. VIAA
b. Knowledge management
c. EIS
d. None of the above.
Difficulty: Easy Reference: p. 581
18.
Which of the following utilizes a database of user preferences in order to predict user outcomes?
a. Personalization agents
b. Collaborative filtering
c. Active filtering
d. None of the above.
Difficulty: Medium Reference: p. 583
19.
Which of the following is not an issue affecting intelligent software agents?
a. Vigilance
b. Privacy
c. Legal issues
d. All of the above are issues affecting ISAs.
Difficulty: Easy Reference: p. 584
20.
Which of the following is a method to determine the degree of humanlike intelligence displayed by a computer?
a. Deming test
b. Gates test
c. Juran test
d. None of the above.
Difficulty: Hard Reference: p. 590
Essay Questions
21.
Briefly describe how a DSS can be used to support manufacturing.
22.
Briefly describe virtual reality.
23.
What is a High Performance Storage System?
24.
What is Moore’s Law?
25.
Briefly describe the Turing test.
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