physical-asset+specificity

This information is from //Managerial Economics and Business Strategy// by Michael R. Baye on page 209.


 * Physical-asset specificity** refers to a situation where the capital equipment needed to produce an input is designed to meet the needs of a particular buyer and cannot be readily adapted to produce inputs needed by other buyers.

For example, if an automobile engine requires a special part that is useful only for producing the engine for a particular buyer, the part is a specific physical asset for producing the automobile engines.

__Question 1:__ True or False -- physical asset specificity refers to equipment that is needed to produce an input for a generic product that will fill the needs of many buyers?


 * Answer is False**

__Question 2:__ True or False -- physical asset specificity refers to human capital needed for an assembly line?


 * Answer is False**