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:

Conformity

The process of aligning one's feelings, thoughts, and actions with the norms, pressures, or expectations of a group.

Obedience

The act of following orders or directives from an authority figure, often without questioning them.

Bystander Effect

A phenomenon in social psychology where people are less inclined to provide assistance to a person in distress when they are in the company of others.

Physical Danger

The risk or threat of bodily harm or injury.