Opportunistic behavior may occur when
A) a firm buys its inputs from multiple suppliers.
B) firms incur significant transaction costs when negotiating contracts.
C) a firm backwards vertically integrates.
D) a firm can buy a key component from only one supplier.
D
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The use of money as a medium of exchange
I. lowers transaction costs. II. permits more specialization. A) I only B) II only C) Neither I nor II D) Both I and II
The neoclassical model predicts that nations that are initially poor should have
A) slower growth rates than nations that are rich. B) faster growth rates than nations that are rich. C) growth rates equal to those of nations that are rich. D) negative growth rates.
Penny, an avocado farmer, wants to purchase a new desk that has been priced at $150. Avocados cost $2.50 each, so Penny knows that the desk is equal to 60 avocados. This illustrates money’s function as a ______.
a. means of deferred payment b. store of value c. medium of exchange d. unit of account
Why would you expect the demand for diamond jewelry to fall faster than plastic, costume jewelry when all incomes fall?
What will be an ideal response?