Vertical integration can reduce transaction costs through all of the following ways except which one?
A) increasing the complexity of coordination
B) decreasing the incentive for litigation
C) decreasing search cost
D) increasing information and control
A) increasing the complexity of coordination
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Refer to Figure 21-1. Which of the following is consistent with the graph depicted above?
A) Households become spendthrifts and begin to save less. B) An expected recession decreases the profitability of new investment. C) The government runs a budget surplus. D) Technological change increases the profitability of new investment. Figure 21-2
Edie looked at two apartments that were virtually identical except the one near the subway station was $1,800 a month and the one 10 blocks away was $300 less. What explains the difference in price?
a. The convenience of the train caused higher demand. b. The supply of apartments near the train was higher. c. The distant neighborhood was more desirable. d. Demand was higher in the less active neighborhood.