Dispersing the Performance of Value Chain Activities to Many Different

question 2

Multiple Choice

Dispersing the performance of value chain activities to many different countries rather than concentrating them in a few country locations tends to be advantageous in all of the following situations except

• A)when high transportation costs make it expensive to operate from central locations.
• B)if resources retain their foreign contexts so there is competitive advantage over a broader domain.
• C)when it is desirable to hedge against (1)the risks of fluctuating exchange rates, (2)supply interruptions,or (3)adverse political developments.
• D)if diseconomies of large size exist,thereby making it more economical to perform an activity on a smaller scale in several different locations.
• E)whenever buyer-related activities are best performed in locations close to buyers.

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Definitions:

Scarcity

The fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Production Possibilities Frontiers

is a curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, labor, etc.), assuming all inputs are used efficiently.

Great Depression

A severe worldwide economic downturn that took place during the 1930s, starting in the United States, leading to high unemployment and financial instability.

Full Employment

A situation in which all available labor resources are being used in the most economically efficient way, typically characterized by the absence of involuntary unemployment.