A System of Barter Has Substantial Transactions Costs Because

question 18

Multiple Choice

A system of barter has substantial transactions costs because

• A)taxes under such a system are generally a large fraction of the value of output.
• B)traders must spend considerable time searching for trading partners.
• C)the uncertainties of trade result in high legal fees being incurred to draw up binding contracts.
• D)the uncertainties of trade result in high insurance premiums.

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Definitions:

Performance Measure

A metric or indicator used to gauge the efficiency, effectiveness, or success of an organization's activities.

Manufacturing Capacity

The maximum volume of products that can be produced in a given period under normal working conditions.

Overall Equipment Effectiveness

A measure of manufacturing productivity that combines availability, performance, and quality metrics of equipment.

Machinery

The machines, equipment, and devices that perform various tasks in the manufacturing of goods and provision of services.