Market Signals and the Evolution of Business — Economic Systems as Living Systems examination

Eleven questions. Nine of eleven passes, and you can take it again as often as you like.

Bartholomew's quarterly report shows sales down 15% and inventory up 20%. What does his accountant suggest the signal is saying?

The town has stopped buying buttons of any kind at all The market now prefers the plumage sold across the street His porcelain buttons are priced far too cheaply for the town His Italian supplier has quietly lowered its quality
What does Bartholomew realise he must do to survive?

Listen to the market and join the town's living system Defend good taste whatever his customers happen to want Cut his prices until he undercuts Mildred's shop Close the shop and stop selling buttons altogether
In the forest cycle, sunlight is captured by leaves and stored as energy in trees. How does the module classify this?

A stock becoming a flow A flow becoming a stock A coupling between two forests A feedback loop with no stock
What makes a thermostat a useful picture of an economic feedback loop?

It cycles through sensing, responding and adjusting It sends out a signal that amplifies itself indefinitely It lets a central planner override every other part It holds one fixed setting that never changes at all
In the module's unemployment example, what happens after unemployment begins to rise?

Firms start hiring again straight away to restore lost demand, which is how it is often framed by default Spending rises as workers draw on savings, ending the slump quickly Prices climb sharply and draw a wave of new businesses in Spending falls, firms lay off more workers, and the problem deepens
According to the module, what determines how antifragile an economy is?

How quickly it manages to grow during the good years The size and market share of its largest company Its diversity, adaptability and strong institutions How completely it manages to avoid every downturn
In the apples-and-oranges model, why is consumption subtracted from production?

To set the carrying capacity of the whole orchard To work out how many new trees must be planted To calculate the price that consumers will pay To find the net change in each good's stock
A venture capitalist sees an 80% chance of $10 million and a 20% chance of losing the $5 million invested in EcoBloom. What is the expected return using the module's formula?

$5 million $10 million $7 million $8 million
EcoBloom's success might inspire other startups and reshape the food system. Which principle does this illustrate?

Emergence from the firm's interaction with its environment A coupling failure between the investors and the founders A balancing loop that restores the old equilibrium in food A carrying-capacity limit on the spread of vertical farming
What does "invest in adaptive capacity" mean for institutional investors?

Hold only cash until the markets have settled down again Favour firms that innovate Avoid any firm that changes or expands its product line Buy whichever firms returned the most in the last quarter
How does the module say circular-economy practices reduce long-term risk?

By raising the number of products sold each year By shortening the useful life of every product By decoupling growth from finite resources By relying on one single dependable supplier