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  2. Business
  3. Microeconomics Study Set 26
  4. Quiz 10: Organizing Production

Dell Uses Outsourcing, That Is, Dell Buys the Components of the Computers

Question 286
Multiple Choice

Dell uses outsourcing, that is, Dell buys the components of the computers it produces from other firms. This is an example of A) firm coordination. B) a partnership. C) a command system. D) market coordination.

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Q 287
Which of the following is NOT an advantage of firm coordination of economic activity? A) Firm coordination decreases transactions costs. B) When firms coordinate economic activity, there are no opportunity costs. C) Firms can take advantage of the economies of team production. D) Economies of scope can be realized by firms that produce a range of goods and services that share specialized resources.
Q 288
Costs to the firm arising from reaching agreements on input prices with suppliers and then ensuring that terms of agreements are fulfilled, are called A) negotiation costs. B) agency costs. C) transactions costs. D) implicit costs.
Q 289
One reason why firms replace markets for some activities is that firms A) reduce the number of transactions required. B) enable individuals to avoid a large portion of their taxes. C) reduce the rate at which the product is wasted. D) do not require team production.
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