In economic theory, transaction costs refer to
A) fees charged by brokers, traders, or other agents rather than by principals.
B) costs attributable to the operations of middlemen.
C) costs of arranging and carrying out voluntary exchanges.
D) costs of obtaining customers or of marketing a product.
E) costs not borne by the persons creating them.
C
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The purchase of a computer by a person for household use would be counted in what category of GDP?
A. The purchase is included as part of investment. B. The purchase is not included in GDP at all, but the value of services the computer gives is included in consumption each year. C. The purchase is counted as consumption if the computer was manufactured in the United States; otherwise, it is ignored. D. The purchase is always counted as consumption.
Suppose that in the free market, where the supply of the foreign currency is equal to demand for that currency, the peso-dollar exchange rate is 4 pesos = $1
Assume the central bank sets an official exchange rate at 3 pesos = $1, we can say that in the official market the dollar is A) overvalued. B) undervalued. C) appreciated. D) None of the above.
Clark wishes to buy books and pens. Clark's best choice would be: a. choosing a consumption bundle that lies above the budget line
b. choosing a consumption bundle that lies below the budget line. c. choosing the consumption bundle where his highest indifference curve is tangent to the budget line. d. choosing the consumption bundle where his lowest indifference curve first intersects the budget line.
If the price elasticity of demand is 1.3, demand is:
A. upward sloping. B. inelastic. C. unit elastic. D. elastic.