Which of the Following Is True Regarding Value, Transaction Costs

question 219

Multiple Choice

Which of the following is true regarding value, transaction costs, and exchange?

• A) Middlemen can be viewed as agents who create value by reducing transaction costs and, thereby, facilitating gains from exchange.
• B) Middlemen fail to create value since they do not expand the supply of physical goods.
• C) A good or service has a given value regardless of who uses it or how it is used.
• D) Voluntary exchange reduces value by channeling goods into the hands of people who value them least.

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Definitions:

Introspection

The process of examining or observing one's own mental and emotional states.

Empiricism

The theory that states knowledge comes only or primarily from sensory experience.

Behaviourism

A philosophy basing psychology on the study of observable and measurable behaviors rather than mental states.

Psyche

The human soul, mind, or spirit, encompassing conscious and unconscious aspects of personality.