Firms Prefer HCNs When ________

question 78

Multiple Choice

Firms prefer HCNs when ________.

• A) the host country environment is complex
• B) the host country has no specialized knowledge to share
• C) the parent country is keen on maintaining full control over foreign operations
• D) managers located in the headquarters adopt a dominantly ethnocentric approach to hiring

---

Definitions:

Marginal Returns

The additional output that is produced by utilizing one more unit of a particular input, while holding all other inputs constant.

Short-Run Average Total Cost (ATC₂)

The total cost divided by the quantity produced in the short-run, where some inputs are fixed.

Diminishing Marginal Returns

A principle stating that if one factor of production is increased while others are kept constant, the resulting increase in output will eventually decline.

Short-Run Average Total Cost (ATC)

The total cost per unit of output in the short run, where some factors of production are fixed.