When two people agree to a price in a negotiation, we can assume that:
A. only one of the parties will benefit, but there is not enough information to determine which one it will be.
B. both parties will benefit.
C. the seller will receive more benefit from the transaction than the buyer.
D. each one will receive equal benefits from the transaction.
Answer: B
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Every year from 1954 to 1984, the U.S. economy was characterized by higher output and lower prices
a. True b. False Indicate whether the statement is true or false
When would demand for a good be more inelastic?
a) when there are fewer available substitutes b) when the time period is considered longer c) when the good is considered more of a luxury good d) when the market is more narrowly defined
A problem with a precommitment policy is that it:
A. locks the Fed into contractionary policy. B. determines the Fed's response for a period of time. C. binds the hands of the Fed from responding to unexpected events. D. will cause the Fed to lose credibility.
Related to the Economics in Practice on page 198: If the long-run average cost curve in an industry has a long, flat section, which of the following must be true?
A. There would be no difference between the industry's short-run average cost curve and its long-run average cost curve. B. Existing firms have no incentive to expand. C. There is no single point on the curve that is the best. D. Small firms have higher average costs than large firms.