It Is Most Appropriate for a Firm to Contract Out

question 66

Multiple Choice

It is most appropriate for a firm to contract out manufacturing when

• A) individual manufacturers have few firm-specific skills that contribute to the value of their product.
• B) the value of the host country currency is expected to appreciate.
• C) supplier switching costs are correspondingly high.
• D) firm-specific technology and expertise add significant value to the product.
• E) the currency used for pricing a product is anticipated to stay weak in the long run.

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Definitions:

Learned Helplessness

A psychological condition in which individuals believe they lack control over events and therefore do not try to change their situation despite having the ability to do so.

Animals

Multicellular, eukaryotic organisms in the kingdom Animalia that are capable of movement and respond to their environment; they consume organic material, breathe oxygen, and can reproduce.

Secondary Reinforcers

Stimuli that acquire their reinforcing properties through association with primary reinforcers, often linked to satisfying basic needs.

Negative Reinforcers

An aversive stimulus whose removal following a behavior increases the likelihood of that behavior being repeated.