If a firm anticipates that it is at a risk of being held up, it is more likely to
a. forgo the transaction completely
b. merge with its trading partner
c. exchange "hostages"
d. All the above
d
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At the beginning of the year, Becky's wealth was $30,000. During the year, she earned $50,000 of income, paid $6,000 in taxes and consumed $43,000 of goods and services. What is Becky's wealth at the end of the year?
What will be an ideal response?
An insurance company offering discounts to students with high grades in school an example of:
A. screening. B. signaling. C. statistical discrimination. D. building a reputation.
Which of the following is an example of a temporary price differential in a resource market?
a. land downtown is more expensive than land in the suburbs b. a superstar professional basketball player is paid more than the average professional player c. cable television installers have a higher wage than telephone installers d. an airline pilot is paid more than a flight attendant e. a worker in a toxic waste plant earns more than a teacher
Fixing the insolvency problem caused by the Great Recession, the U.S. Federal Reserve as reluctant to purchase toxic assets from banks because:
a. It could cause an unwanted expansion of the e U.S. monetary base. b. Toxic security purchases had to be funded, and the Fed already had a major debt problem. c.It could cause an unwanted contraction of the U.S. monetary base. d. The Fed could be accused of nationalizing the U.S. financial system. e. All of the above.