Some Economists Suggest That Because of the Costs of Negotiating

question 38

Multiple Choice

Some economists suggest that because of the costs of negotiating contracts, printing price lists, etc., it is costly for firms to change prices in response to demand changes. This hypothesis is known as the

• A)sticky wage theory.
• B)menu cost theory.
• C)Phillips theory.
• D)Friedman theory.

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Definitions:

External Environment

The conditions, entities, events, and factors surrounding an organization that influence its activities and choices but are beyond its control.

Bicultural Audit

An evaluation process that examines how effectively an organization or program operates across two distinct cultural environments.

Cultural Clashes

Conflicts arising from differences in values, norms, or behaviors between individuals or groups from different cultures.

Adaptive Culture

An organizational culture characterized by flexibility, customer focus, and an ability to change in response to external conditions.