Choose wisely. There is only one correct answer to each question.
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1.
Of the following four questions about business analysis, which one would you most likely need outside help answering?
How well is the business positioned relative to its competitors? For this one, you would need to get information about several other businesses to help you answer it.
2.
Which of these companies best exemplifies the use of the network effect?
EBay. eBay is the quintessential example of a company with a strong network effect.
3.
Which of these is not a type of economic moat?
Technological expertise. Technological expertise can form the foundation for an economic moat, but it is rare that the expertise provides a sustainable, long-term competitive advantage, because improvements in technology are often easily imitated.
4.
Determining the goal of a business is normally easy.
False. Sometimes it is not easy, because a business might combine different objectives.
5.
In the terminology of economic moats, a concept developed by Warren Buffett, a moat can be described by which of the following terms?
Both of the above. A moat has width and depth, and these characteristics help describe its value to the business.
