If the Quality of an Input Is Easily Determined at the Time

question 151

Multiple Choice

If the quality of an input is easily determined at the time of purchase, then it is likely to

• A)be the cause of high transaction costs of using markets
• B)encourage vertical integration of a firm
• C)encourage supplier firms to produce low-quality inputs
• D)be produced internally by the firm
• E)be purchased in the market

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Definitions:

Sociobiology

The study of the biological basis of all social behavior.

Cultural Variations

Differences in cultural practices, beliefs, and values among various groups, influencing behaviors, perceptions, and social norms.

Heritability

A measure of how much of the variation in a trait among individuals within a population is due to genetic differences.

Identical Twins

Twins that develop from a single fertilized egg that splits and forms two embryos, sharing 100% of their DNA.