Transaction costs can be defined as the costs:
A. the government must pay to allow for an exchange.
B. incurred by buyer and seller in agreeing to and executing a sale of goods or services.
C. the government incur to create a structured market for the exchange of buyers and sellers.
D. incurred by the buyer and seller in agreeing to and executing a purchase of goods or services, excluding transportation costs.
Answer: B
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Assume Victoria's indifference curves are bowed outward but her indifference curves satisfy the other three properties of indifference curves. As Victoria moves from right to left along the horizontal axis, her marginal rate of substitution
a. increases. b. decreases. c. remains constant. d. increases, then decreases.
When demand decreases, the demand curve shifts
A. on its axis, becoming flatter. B. upward and to the right. C. downward and to the left. D. on its axis, becoming more vertical.
Other things equal, an increase in a consumer's money income:
A. increases the amount of utility a consumer receives from a given quantity of a good. B. shifts the individual's budget line rightward because she can now purchase more of both products. C. eliminates the individual's economizing problem. D. causes the consumer to choose a different combination of goods along a given budget line.
One drawback to a single currency is that
A) the exchange rate is more volatile. B) bond markets are larger and therefore harder to control. C) exporters and importers have fewer choices about how they will receive and make payments. D) individual nations cannot use monetary policy to stabilize the economy.