If the quality of an input is easily determined at the time of purchase, then it is likely to
a. be the cause of high transaction costs of using markets
b. encourage vertical integration of a firm
c. encourage supplier firms to produce low-quality inputs
d. be produced internally by the firm
e. be purchased in the market
E
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Coca-Cola bottlers increased their prices as the price of sugar (an important ingredient in producing Coke) rose sharply in the late 1980s. Under these circumstances, the increase in the price of Coke occurs as a result of a(n): a. decrease in supply. b. decrease in demand. c. increase in supply
d. increase in demand.
Which of the following statements best describes the comparative advantage of the corresponding country regarding the iPhone?
a. The United States has a comparative advantage in designing and marketing products. b. China has a comparative advantage in designing and marketing products. c. Korea has a comparative advantage in producing components. d. China has a comparative advantage in producing components.
There are dozens of pasta producers that sell pasta to hundreds of Italian restaurants nationwide. The restaurant owners buy from the cheapest pasta producer available to them.
A. Yes, meets all assumptions B. No, no free entry C. No, not many sellers D. No, not a homogeneous product
The balance of payments constraint refers to the limits on:
A. exchange rate policy imposed by flexible exchange rates. B. currency convertibility observed in most developing countries. C. domestic macroeconomic policy, arising from a shortage of international reserves. D. macroeconomic policy resulting from IMF conditionality.