Employing a Lawyer to Draft and Enforce a Private Contract

question 204

Multiple Choice

Employing a lawyer to draft and enforce a private contract between parties wishing to solve an externality problem is an example of

• A)an opportunity cost.
• B)an implicit cost.
• C)a sunk cost.
• D)a transaction cost.

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Definitions:

Governmental Functions

Activities and responsibilities carried out by a government, typically including legislation, law enforcement, and provision of public services.

Assignment

The transfer of rights, property, or duties from one party to another.

Delegation

The act of assigning responsibility or authority to another person to carry out specific duties.

Third-Party Beneficiary

An individual or entity that, while not a direct party to a contract, is intended by the contracting parties to benefit from it.