Although coal and iron ore are both important raw materials used in steel production, coal is a more specific resource compared to iron ore.
Indicate whether the statement is true or false
QUESTION 2Repeated games often lead to cooperation.
Indicate whether the statement is true or false
QUESTION 3The quantity of funds supplied by lenders is:
a. directly related to the rate of interest.
b. inversely related to the rate of interest.
c. unrelated to the rate of interest.
d. first increases and then decreases with the rate of interest.
QUESTION 4A thin market usually does not allow the use of futures contracts or other hedging tools.
Indicate whether the statement is true or false
QUESTION 5Sunk costs can be commitments.
Indicate whether the statement is true or false
QUESTION 6The demand curve for loanable funds is downward sloping because:
a. people save more at higher interest rates.
b. more investments are profitable at low interest rates than at high interest rates.
c. future income is more valuable now at higher interest rates than at lower interest rates.
d. usury laws increase the quantity of funds demanded at low interest rates but do not affect the quantity of funds demanded at high interest rates.
QUESTION 7Vertical integration of the different stages of spun yarn production increases transaction costs and the risk of opportunism since each stage employs highly specific assets.
Indicate whether the statement is true or false
QUESTION 8A commitment is a form of strategy.
Indicate whether the statement is true or false
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