Mention the different aspects of specificity of an asset
Many aspects of specificity can raise the cost of redeployment and the risks of
opportunism:
1 . Task specificity: Specialized equipment is often necessary for low-cost production. One manufacturer's machine may only work for another make of car after costly modification.
2 . Locational specificity: Once built, facilities like electrical generators are immovable.
3 . Dedicated specificity: Equipment purchased for providing a specific service cannot be reused for other services.
4 . Human specificity: Workers can also have degrees of specificity. An employer's investment in company-specific skills can make a worker more productive, but that worker also has leverage during a salary review because if she leaves the employer incurs the cost of training a replacement.
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Your textbook argues that in a market system income is earned and "distributed"
A) in the process of its creation. B) as a result of the supply and demand for productive services. C) in ways that might not be considered "fair" in all cases. D) in all of the above ways.
When a perfectly competitive firm is in long-run equilibrium, economic profits
A) are positive. B) are zero. C) are negative. D) may be positive, zero or negative depending upon costs.
Nash equilibria:
a. always exist in pure strategies. b. generally come in even numbers. c. always exist in finite games. d. all of the above.
If the short-run Phillips curve is steep, the inflationary costs of using expansionary policy to reduce unemployment would be substantial
a. True b. False Indicate whether the statement is true or false