Employing a Lawyer to Draft and Enforce a Private Contract

question 204

Multiple Choice

Employing a lawyer to draft and enforce a private contract between parties wishing to solve an externality problem is an example of

• A)an opportunity cost.
• B)an implicit cost.
• C)a sunk cost.
• D)a transaction cost.

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Definitions:

PSAB

stands for Public Sector Accounting Board, which sets accounting standards for public sector entities in some countries, focusing on transparency and accountability.

Controlled Entities

Entities over which another entity has the power to govern financial and operating policies, typically through ownership of a majority voting interest.

Government Organization

An entity that is part of the government and is responsible for the administration and governance of a specific function or area.

Tangible Capital Assets

Physical, long-term assets held for business use and not expected to be converted to cash in the short term, such as buildings and machinery.