Chapter 03
Types and Patterns of Innovation
True / False Questions
1. The path a technology follows through time is termed as technology trajectory.
True False
2. Product innovations are more important than process innovations to organizations because they are less visible th...
1. Investing in process innovation helps firms lower their costs.
True False
2. Flexible manufacturing technologies have increased the importance of production
economies of scale.
True False
3. Globalization of markets has reduced the importance of innovation.
True False
4. Innovation and new technologies have led to longer product life cycles and slower
product obsolescence.
True False
5. Technological innovation decreases the amount of output achievable from a given
quantity of labor and capital.
True False
6. GDP does not directly relate to the amount of goods consumers can purchase.
True False
7. Externalities are costs that are borne by individuals other than those responsible for
creating them.
True False
8. Technological innovation results in complete eradication of negative externalities.
True False
9. If a business discharges untreated chemical waste into the local water bodies of a
community, it imposes a negative externality on the community members.
True False
,10. Most innovative ideas do not become successful new products.
True False
11. The majority of effort and money invested in technological innovation comes from
nonindustrial firms.
True False
12. The innovation process is often conceived of as a funnel because most potential new
product ideas make it through the development process.
True False
13. According to the concept of innovation funnel, the number of successful products
launched will be greater than the number of raw ideas generated.
True False
14. According to the concept of the innovation funnel, one new idea is usually responsible
for several new products.
True False
15. A firm's organizational structure and control systems have no influence on the
generation of innovative ideas.
True False
Multiple Choice Questions
16. Which of the following is an advantage of flexible manufacturing technologies?
A. They have made shorter production runs
economical.
B. They have increased the importance of production economies
of scale.
C. They eliminate the need for differentiation from
competitors.
D. They have reduced the importance of technological innovation in
industries.
, 17. As a result of the rapid pace of innovation:
A. product life cycles have become
short.
B. product development cycles have become
significantly longer.
C. market segmentation has
reduced.
D. product obsolescence has slowed
down.
18. The _____ of an economy is its total annual output as measured by its final purchase
price.
A. balance of
payment
B. gross domestic
product
C. cash reserve
ratio
D. net national
income
19. Which of the following is true of technological innovations?
A. Technological innovations help increase a country's gross
domestic product.
B. Technological innovations decrease the amount of output achievable from a given
quantity of labor and capital.
C. Technological innovations slow down product obsolescence and lengthen the product
development cycles.
D. Technological innovations increase production costs and reduce product
differentiation.
20. Virtual Inc., a manufacturing company, has recently entered the cell phone industry. This
industry is characterized by rapid technological innovations. Which of the following is
most likely to be true for Virtual?
A. The life cycle of its cell phones will be
very long.
B. It will face rapid product
obsolescence.
C. It will face low market segmentation in the cell phone
industry.
D. It will have a lower need for product
differentiation.
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