Long-Term Contracts

question 39

Multiple Choice

Long-term contracts:

• A) are preferable to short-term contracts when there is a minimal need for cooperation.
• B) are preferable to vertical integration when it is not feasible to exchange hostages.
• C) generally result in lower prices than competitive bidding.
• D) achieve the same outcomes as vertical integration, but they incur higher bureaucratic costs.
• E) are a low-cost alternative to vertical integration when it is possible to build cooperative relationships with suppliers.

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Definitions:

Voluntarily Move

The action of moving muscles at will, involving conscious control, primarily managed by the nervous system.

Sensations

Perceptions or feelings that result from the stimulation of the sensory organs.

Heart Stops

A critical condition where the heart ceases to beat, resulting in a sudden stop of blood circulation; also known as cardiac arrest.

Primary Somatic Sensory Cortex

The region of the cerebral cortex that receives and processes sensory information from the body.