An oil refinery plant imports much of its crude oil from overseas. A procurement manager in the refinery suggests that fixing the crude oil contract price for 36 monthswould be beneficial for the company. Would this be a right thing to do?

• A.Yes, financial budgeting task would be a lot easier with fixed pricing arrangement
• B.No, fixed price should be only applied to contracts that last 60 months or longer
• C.No, the refinery would not be able to reap the benefits from falling commodity price and currency rates
• D.Yes, the supplier would bear the risk when the material price increased

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A negotiation is coming to the end. Both parties haven't had any official commitments. Right before leaving the room, the buyer strongly disagrees with supplier's set up prices and requests a discount. The supplier doesn't reply but nods and smiles. Can the buyer consider these actions as an acceptance?

• A.Yes, because smiling shows supplier's readiness in signing the deal off
• B.No, because nodding and smiling are etiquette of polite rejection
• C.No, because nodding and smiling are not clear signs of neither acceptance nor rejection
• D.Yes, because negotiator should rely on non-verbal communications only

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Which of the following should be adopted to minimise the conflict between parties in commercial negotiation?

• A.The rule of law
• B.Ground zero
• C.Ground beam
• D.Ground rules

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Which of the following is definition of elasticity of demand in microeconomics?

• A.The percentage change in the quantity demanded divided by the percentage change in income
• B.Thepercentage change in price of a good divided by the percentage change in the quantity demanded of that good.
• C.The percentage change in the quantity demanded of a good divided by the percentage change in the price of that good
• D.The percentagechange in income divided by the percentage change in the quantity demanded

Correct Answer: C

Elasticity refers to the responsiveness of quantity demanded or quantity supplied to a change in price or another factor:
The price of a product can be described as being elastic if a small change in price leads to a big change in demand.
The price of a product can be described as being inelastic if a big change in price leads to a small change in demand.
The formulae of elasticity of demand is known as the following:
Text Description automatically generated with low confidence

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Distributive approach in negotiation is typified by which of the following?

• A.Distributive approaches are inherently inferior tointegrative approaches in commercial negotiation
• B.Both parties understand each other's goals
• C.Each party attempts to maximise the value obtained at other's expense
• D.Both parties share 50:50 of the 'pie'

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