High transactions costs are reflected in
A) wide bid-asked spreads.
B) narrow bid-asked spreads.
C) high equilibrium prices.
D) low equilibrium prices.
A
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A consequence of adverse selection is:
A. buyers gain surplus they would have lost with complete information. B. sellers gain surplus they would have lost with complete information. C. transactions do not take place that would have been possible if the parties had the same information. D. buyers make irrational decisions because they lack information.
If Spain is capable of producing either tapas or soccer balls or some combination of those two products, then Spain should:
A. trade only if it possesses the absolute advantage in the production of both goods. B. remain self-sufficient if it can produce both efficiently. C. produce the good it has an absolute advantage in producing. D. produce the good it has a comparative advantage in producing.
One of the costs not associated with predictable inflation is:
A. menu costs. B. tax distortions. C. labor costs. D. shoe-leather costs.
In the long run a monopolistically competitive firm:
A. earns an economic profit. B. produces where P = ATC. C. produces where MR exceeds MC. D. achieves allocative efficiency.