The shares of the economic value of a particular transaction that accrues to the seller and the buyer depend on:
a. the buyer's opportunity cost.
b. the relative bargaining powers of the two parties.
c. the cost of production incurred by the seller while producing the good.
d. the lobbying techniques adopted by the two parties.
B
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Which of the following would be considered an example of fiscal policy?
A. Provision of additional cash to the banking system. B. A reduction in income tax rates. C. A broad government initiative to reduce the country's reliance on agriculture and promote high-technology industries. D. Interest rate hikes generated by a reduction in the money supply.
If cable TV service and satellite TV service are substitutes,
a. a decrease in the price of cable will decrease the demand for satellite TV. b. an increase in the price of cable will decrease the demand for satellite TV. c. an increase in the price of cable will generally have no effect on the demand for satellite TV. d. an increase in the price of cable will shift the demand curve for satellite TV to the left.
An economy has two workers, Paula and Ricardo. Every day they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the opportunity cost for Paula to produce one shirt?
A. 2 computers B. ½ computer C. ¼ computer D. 4 computers
If tax reduction and simplification are effective, then
A) real wages will rise as labor supply and demand increase. B) economic efficiency will increase. C) interest rates will rise in financial markets and demand for financial assets falls. D) fewer new firms will be established, since existing firms will make more profit.