Choice "b" is correct. Internal costs analysis includes analyzing the internal value-creating ability of a

firm, so the sources of profit and costs of the internal activities of the firm must be analyzed.

Choices "a", "c", and "d" are incorrect, per the above Explanation: .

Choice "a" is correct. Setting the overall goals of the firm is usually the starting point in strategic

planning.

Choice "b" is incorrect. The organizational structure will be partially determined by the goals of the

firm.

Choice "c" is incorrect. Recent annual budgets may be reviewed as an aid in planning, but they are

not the first consideration in strategic planning. In fact, they often are ignored.

Choice "d" is incorrect. Being an industry leader may be or become a goal of the firm, but that would

be determined during the strategic planning process.

Choice "d" is correct. Real GDP per capita is real GDP divided by population. Real GDP per capita is

typically used to compare standards of living across countries or across time. By dividing real GDP by

population, this measure adjusts for differences in the size of countries and for differences in

population over time.

Choice "a" is incorrect. Government spending is not a measure of the standard of living of a country.

Choice "b" is incorrect. Countries with larger populations tend to have higher levels of real GDP. This

however does not mean they have a higher standard of living. To adjust for differences in population,

real GDP per capita is typically used to compare standards of living, not real GDP.

Choice "c" is incorrect. Real consumption expenditures are only a part of real GDP and thus do not

measure all economic activity. Furthermore, real consumption expenditures do not adjust for

differences in population. It is therefore not used as a measure of the standard of living.

Choice "c" is correct. The general (or aggregate) demand for labor will remain unchanged; however,

the quantity demanded will decrease.

Choice "a" is incorrect, per Explanation: for choice "c" above.

Choices "b" and "d" are incorrect. The general (or aggregate) supply of labor will remain unchanged;

however, the quantity supplied will increase.

Choice "a" is correct. In the cross-functional teams stage of supply chain management, the firm's

management will turn its attention to consolidation of the various departments that make up

operations in order to solve the firm's problems, and the focus will be on customer service.

Choice "b" is incorrect. In the integrated enterprise stage of supply chain management, the firm's

management will move away from simple consolidation of its operations to an internally-integrated

supply chain, which all work together towards the main business issue of the cost of customer

service.

Choice "c" is incorrect. In the extended supply chain stage of supply chain management, integration

moves external to the firm to involve those outside the firm who are able to work as a unified team

in an attempt to obtain slow, profitable growth.

Choice "d" is incorrect. In the supply chain communities stage of supply chain management, the

extended supply chain forms a single competitive entity with a synchronized supply chain and a

complex system of networks.

Choice "b" is correct. An increase in government spending causes an increase in aggregate demand

(i.e., causes the aggregate demand curve to shift right). As a result, an increase in government

spending causes real GDP to rise and unemployment to fall.

Choice "a" is incorrect. Real GDP will rise, not fall.

Choice "c" is incorrect. Unemployment will fall, not rise.

Choice "d" is incorrect. Real GDP will rise, not fall.

Choice "a" is correct. The expenditure approach to computing GDP includes:

Consumption

Net exports

Government expenditures

Capital investment

Choices "b", "c", and "d" are incorrect, per the Explanation: above.

Choice "b" is correct. Analysis of the core competencies of a firm help it to determine why it is able

to create, attain, and sustain new types of competitive advantage and profits and reveal what it is

within the firm that enables it to obtain competitive advantage.

Choice "a" is incorrect. Industry structure analysis assists in determining what it is that makes a firm

more profitable compared to another firm, and it looks at five forces that influence profitability of an

industry or market and, thus, the competitive environment.

Choice "c" is incorrect. Segmentation analysis is a possibility when a firm is vertically integrated and

when the industry structure and core competencies vary among activities in the value chain.

Choice "d" is incorrect, as choice "b" is the answer to the question.

Choice "c" is correct. According to Michael Porter, the two major categories of business activities are

primary activities and support activities.

Choices "a", "b", and "d" are incorrect, per the above statement.

Choice "d" is correct. Complementary goods are ones whose demand fluctuates together. If Good A

and Good B are complements, then if the demand for Good A increases, the demand for Good B will

also increase, tennis rackets and tennis balls are complements.

Choice "a" is incorrect. For substitutive goods, as the price of one of the goods increases, the other

good experiences an increase in demand as it is substituted for the first good. An example of

substitute goods is apple and orange juice.

Choice "b" is incorrect. Independent goods have demand functions that are not interrelated. An

example would be bread and vacuum cleaners.

Choice "c" is incorrect. Inferior goods experience a decrease in demand when income levels rise. An

example is hamburger, which experiences decrease in demand as incomes rise and buyers switch to

higher priced meats.