Which of the following statements is NOT true about exchanges in the market system?
A. Exchanges occur only in situations of barter where the market price is irrelevant.
B. In voluntary exchange both parties are better off because of the exchange.
C. Prices indicate what is relatively abundant and what is relatively scarce.
D. Transaction costs in exchanges include the cost of enforcing a contract as well as the costs of information.
Answer: A
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Jack was unemployed two weeks ago but just started a new job. As a result of this increase in the number of employed workers, which of the following occurred?
A) The labor force participation rate increased. B) The unemployment rate decreased. C) The unemployment rate increased. D) The labor force participation rate decreased.
Liquidity is:
A. the magnitude of change in the money supply as controlled by the Fed. B. a measure of how easily a particular asset can be converted quickly to cash without much loss of value. C. the speed with which physical dollars change hands in the economy. D. the speed with which dollars are spent in the economy.
Moving downward on a downward sloping linear demand curve, the absolute value of the price elasticity of demand
A) is constant. B) increases continuously. C) decreases continuously. D) may either increase or decrease.
In the derivation of TFC, you find
A. the minimum-slope ray out of the origin to the TVC. B. the vertical intercept of the TC and draw a horizontal line. C. the minimum-slope ray out of the origin to the TC. D. the minimum-slope ray out of the origin to the ATC.