Which of the Following Statements Is True of Internal Transaction

question 33

Multiple Choice

Which of the following statements is true of internal transaction costs?

• A) Internal transaction costs arise when companies transact in the open market.
• B) When the internal costs involved in pursuing an activity in-house are more than the costs of transacting, then the concerned firm should vertically integrate.
• C) Internal transaction costs tend to increase with organizational size and complexity.
• D) It is beneficial to "buy" goods or services rather than "make" when internal transaction costs are low.

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Definitions:

Aha! Experience

A moment of sudden insight or discovery.

Latent Learning

The process of learning that occurs without immediate evidence of understanding or behavior change.

Unconditioned Stimulus

A stimulus that naturally triggers a response without any prior learning or conditioning.

Conditioned Response

A learned response to a previously neutral stimulus that has been repeatedly presented along with an unconditioned stimulus that elicits an automatic response.