Transaction costs are
A) the costs associated with making a transaction that is required by the government.
B) not true costs since they are often not paid.
C) the costs associated with exchanges in the service area.
D) the costs associated with making, reaching and enforcing agreements.
Answer: D
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Briefly explain how a change in the personal income tax rate affects aggregate demand
What will be an ideal response?
Which of the following will NOT affect the position of the market supply curve for a good?
A) The government grants a subsidy to the producers for each unit of a good that they produce. B) The price of the good increases. C) The number of sellers in the market increases. D) There is an increase in the prices of the inputs used in production.
Sam has $200 a month to spend on two normal goods-tanning sessions or rounds of golf. Tanning sessions are $20 each, and a round of golf is $40. Sam currently consumes six tanning sessions and two rounds of golf. If the price of a round of golf drops to $20, the income effect:
A. predicts Sam will increase his consumption of both golf and tanning sessions. B. predicts Sam will double his consumption of golf. C. predicts Sam will consume more golf and less tanning sessions. D. predicts Sam will consume less golf and more tanning sessions.
A monopolist charges $7 per unit for selling 6 units of his product. To sell 7 units, he reduces price to $6.5 per unit. The marginal revenue (net addition to revenue) from selling the seventh unit is then $3.5
Indicate whether the statement is true or false