Long-term contracts become shorter:
A. when spot markets work poorly.
B. when marginal costs are increasing.
C. when specialized investment becomes less important.
D. when the exchange environment is less complex.
Answer: C
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Which one of the following resources is not underemployed?
A. The use of Manhattan Island in New York City for growing corn. B. The use of farmland in the Iowa and Illinois corn belt for buildings to do stock market research. C. An automobile factory that is shut down for two months to be retooled for a model change. D. Limiting all men to the fields of school teaching and social work.
Define a contract and explain with examples
A modern economy has millions of goods and services whose prices are continually increasing and decreasing based on supply and demand.
Select whether the statement is true or false. A. True B. False
All else equal, what happens to consumer surplus if the price of a good decreases?
a. Consumer surplus increases. b. Consumer surplus decreases. c. Consumer surplus is unchanged. d. Consumer surplus may increase, decrease, or remain unchanged.