What Economic Argument Suggests That If Transactions Costs Are Sufficiently

question 506

Multiple Choice

What economic argument suggests that if transactions costs are sufficiently low, the equilibrium is economically efficient regardless of how property rights are distributed?

• A) the Coase theorem
• B) the laws of supply and demand
• C) the law of comparative advantage
• D) the law of externalities

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Definitions:

Statistical Discrimination

Discrimination that arises because an irrelevant but observable personal characteristic is correlated with a relevant but unobservable attribute.

Hiring Manager

An individual within an organization responsible for interviewing, evaluating, and selecting candidates for a specific job opening.

Industry

A segment of the economy composed of businesses and organizations that share a common focus, producing similar goods or services.

Equilibrium Wage

The compensation rate at which the demand for workers by companies matches the supply of workers.