The Inefficiency Induced by All Positional Arms Races Is That

question 64

Multiple Choice

The inefficiency induced by all positional arms races is that:

• A)nobody benefits from superior performance.
• B)the increase in performance diminishes on the margin.
• C)the increase in performance is negative.
• D)spending on performance enhancement continues to escalate beyond the point at which the additional benefit equals the additional cost.

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Definitions:

Bargaining Power

Refers to the ability of one party in a negotiation to influence the terms and conditions in their favor.

Harsh Terms

Unfavorably stringent conditions or stipulations in a contract or agreement that may seem unfair to one party.

Implied-in-Fact Contract

An agreement created by the actions or circumstances of the parties involved rather than by written or spoken words.

Gambling Illegal

The prohibition by law of the practice or act of wagering, betting, or playing games of chance for money or other stakes.