Author Question: Wendy's must decide whether to grow its own potatoes for French fries. Growing potatoes is a very ... (Read 157 times)

s.tung · **on:** Jun 30, 2018

Wendy's must decide whether to grow its own potatoes for French fries. Growing potatoes is a very different process from running a fast-food restaurant. Based on this information alone, should Wendy's grow its own potatoes?
a. No, because Wendy's managers have bounded rationality.
b. Yes, because Wendy's managers have bounded rationality.
c. No, because there is a small number of potato suppliers.
d. Yes, because there is a small number of potato suppliers.
e. No, because it is easy to observe the quality of potatoes.

Question 2

Under a fixed exchange rate system, an increase in Japanese demand for U.S. agricultural goods would
a. cause the U.S. balance of trade to worsen
b. increase the supply of yen relative to the dollar
c. decrease Japanese demand for dollars
d. cause the yen to appreciate
e. cause an immediate revaluation of the yen