In Order for a Voluntary Agreement to Be Reached in General

question 150

Multiple Choice

In order for a voluntary agreement to be reached in general, transaction costs should be

• A) infinite.
• B) high relative to expected marginal benefits of the agreement.
• C) low relative to expected marginal benefits of the agreement.
• D) determined by the Environmental Protection Agency.

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Definitions:

Output Good

A product or service that is the result of a production process.

Profit-maximizing

A strategy or approach by businesses aimed at achieving the highest possible profit from their operations.

Factor 2

In a variety of contexts, this could refer to the second variable or element in an equation, model, or experimental design that influences outcomes.

Price

The amount of money or compensation commanded by something in a market; the cost at which something is bought or sold.