Specific assets can create problems for a company. If a supplier invests in new machinery to deliver a part useful only to its biggest and best customer, it can find itself with:
A. significant externalities.
B. a holdup problem.
C. an outsourcing dilemma.
D. a low cost delivery output.
Answer: B
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Forcing businesses to divert profits to improve job conditions, increase wages and salaries and broaden benefits fuels animosity toward labor unions
Indicate whether the statement is true or false
If the costs of coordination and enforcement are ________ the surplus lost to the externality, then ________.
A. lower than; a private solution will not work B. higher than; a private solution will work C. higher than; a private solution will not work D. None of these statements is true.
An increase in an economy's productive resources will lead the production possibilities curve to:
A. shift outward. B. become flatter. C. shift inward. D. stay the same.