High Transaction Costs Will Tend to

question 28

Multiple Choice

High transaction costs will tend to

• A) reduce the number of mutually beneficial exchanges that occur.
• B) allow easier specialization according to the law of comparative advantage.
• C) increase the value created by exchanges in an economy.
• D) increase the number of mutually beneficial exchanges that occur.

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Definitions:

Energy of Activation

The minimum quantity of energy that the reacting species must possess in order to undergo a specified chemical reaction.

Equilibrium Reaction

A chemical reaction where the rates of the forward and reverse reactions are equal, leading to a constant concentration of reactants and products.

Molecules

Electrically neutral groups of two or more atoms held together by chemical bonds, representing the smallest fundamental unit of a chemical compound that can take part in a chemical reaction.

Toxin

A poisonous substance produced within living cells or organisms that can cause disease when introduced into the body tissues.