Which of the Following Is an Example of an External

question 44

Multiple Choice

Which of the following is an example of an external transaction cost?

• A) the cost of setting up a production unit
• B) the cost of searching for a contract manufacturer
• C) the cost of recruiting and retaining employees
• D) the cost of maintaining plant and machinery

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Definitions:

Beauty Effect

A social phenomenon where individuals perceived as attractive are often given preferential treatment or are judged more favorably.

Rating Error

Mistakes or biases that can occur during the evaluation of employee performance, affecting the fairness and accuracy of appraisals.

Administrative Reason

A justification or cause related to management or procedural issues within an organization.

Merit Pay

A salary increase awarded to employees based on their job performance, used as a tool for motivation and encouragement of high performance.