Ejercicio Short Question 3 · Economia de L'empresa UPF 2011
Tema: Especialització, costos de transacció i mercat versus empresa · Del examen Final Exam Business Economics - December 2011 (2011)
Enunciado
Short Question 3 (6 points). Labor costs vs. transaction costs in outsourcing
A manufacturing company located in Alicante wants to focus on net design and outsource net production to an Indian contractor. This subcontracting will reduce total production expenses as a consequence of a reduction in transaction costs, given that hourly manufacturing wages in India are one-tenth of those in Alicante.
True or False? Briefly justify your reasoning.
True
False
Solución
Según los criterios oficiales de corrección
True or False?
Solución: False
Briefly justify your reasoning.
Solución: Lower labor rates in India decrease transformation (production) costs, not transaction costs. In fact, delegating manufacturing to an external supplier overseas typically increases transaction costs due to the expenses of searching, negotiating, monitoring quality from a distance, and enforcing cross-border contractual agreements.
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