It Is Reasonable to Assume That If There Were No

question 72

Multiple Choice

It is reasonable to assume that if there were no transaction costs in organizing production, _____.

• A) contracts would be incomplete
• B) mergers would not add value to firms
• C) diversification would increase the financial risk of a company
• D) firms would not need to exist

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Definitions:

Émile Durkheim

A founding figure in sociology known for his work on social cohesion, collective conscience, and the study of social facts as phenomena external to individuals.

Collective Conscience

A set of shared beliefs, ideas, and moral attitudes which operate as a unifying force within society.

Mechanical Solidarity

A form of social cohesion in traditional societies where unity comes from individuals performing similar tasks and sharing values, traditions, and beliefs.

Organic Solidarity

A concept introduced by Émile Durkheim, denoting a type of social cohesion that arises when people in a society perform a wide variety of specialized functions, depending on each other for survival.