Which of the Following Correctly Describes a Transaction Cost

question 77

Multiple Choice

Which of the following correctly describes a transaction cost?

• A) A transaction cost is the cost associated with organizing the transaction of goods or services.
• B) A transaction cost is the rent paid to capital used in production.
• C) A transaction cost is the wage paid to labour, a factor of production.
• D) A transaction cost of an activity is the cost of the next best alternative that was given up.

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Definitions:

French Fries And Onion Rings

Often served as side dishes in fast food and diners, they are popular fried food items made from potatoes and onions, respectively.

Hockey Pucks And Hockey Sticks

Items used in the sport of hockey, with the puck being the object teams attempt to score with, and the stick used to hit the puck.

Necessity

A good or service that is essential for survival and basic well-being, such as food or shelter.

Price-Inelastic

Describes a situation where the demand for a product or service is relatively unaffected by changes in its price.