Which of the Following Is True of Implicit Contracts

question 1

Multiple Choice

Which of the following is true of implicit contracts?

• A)Enforcement depends on the private incentives of individuals.
• B)Agents do not act in the best interest of principals.
• C)The gains from trade are low and there are market failures.
• D)The opportunity cost of residual loss is low.

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Definitions:

Trademark

A trademark is a recognizable sign, design, or expression which identifies products or services of a particular source from those of others.

Patent

Legal protection granted by the government to an inventor, giving them exclusive rights to use, produce, and sell their invention for a certain period of time.

Copyright

A legal right granted to an individual or entity to exclusively produce, publish, sell, or distribute the original creative work for a specified period of time.

Goodwill

An intangible asset that arises when a company acquires another company for a premium value, representing the excess of purchase price over the fair market value of the acquired company's identifiable assets and liabilities.