Transaction Costs

question 203

Multiple Choice

Transaction costs

• A)can keep private parties from solving externality problems.
• B)are incurred in the production process due to externalities.
• C)increase when taxes are imposed to correct negative externalities.
• D)are eliminated when the government intervenes in a market with externalities.

---

Definitions:

Supply Curve

A graphical representation showing the relationship between the price of a good or service and the quantity of that good that suppliers are willing and able to provide.

Market

A system or an arena where parties engage in exchange of goods, services, or information.

Positive Externality

A benefit that affects a party who did not choose to incur that benefit, often associated with public goods and services.

Historic Buildings

Structures that hold historical significance due to their architecture, association with important events, or cultural impact.