In order for a voluntary agreement to be reached in general, transaction costs should be
A) infinite.
B) high relative to expected marginal benefits of the agreement.
C) low relative to expected marginal benefits of the agreement.
D) determined by the Environmental Protection Agency.
Answer: C
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If a firm does NOT know its rival's profit function, then we consider that information to be
A) irrelevant in deciding its best strategy. B) private. C) common knowledge. D) Pareto sub-optimal.
Globalization has depressed wages in western industrialized countries, particularly those for
A) highly skilled workers. B) highly educated workers. C) semi-skilled workers. D) low skilled workers.
A firm's short-run average cost is defined as
a. the ratio of total output to short-run total cost. b. the ratio of short-run total cost to total output. c. the additional cost of producing one more unit of output while some input is fixed. d. the additional cost of producing one more unit of output while all inputs are fixed.
Research and development is most likely to have an impact on the _____
a. quantity of labor available b. quantity of capital goods available c. quality of labor available d. quality of capital goods available e. use of energy