Question

In: Economics

Write whether or not each situation would lengthen or shorten a contract, ceteris paribus. a) a...

Write whether or not each situation would lengthen or shorten a contract, ceteris paribus.

a) a highly complex contracting environment with high legal fees
b) an increased need for specialized machinery inputs
c) a move from highly specialized inputs to more basic inputs

Solutions

Expert Solution

Answer A) A highly complex contracting environment with high legal fees will lengthen the contract as there will be many new additions of policies in the contract due to its complexity as well as to make sure nothing goes wrong there will be mention of all the important points and scenarios in the contract and hence this situation would lengthen the whole contract.

B) An increased need for specialized machinery inputs will also lengthen the contract as there will be additions regarding classes and policy for specialized machinery in the contract as well as the specification of the machinery will also be specified along with the delivery instructions and the maintenance services for the machinery etc. so this situation will lengthen the contract.

C) A move from highly specialized inputs to more basic inputs will shorten the contract as there will be far lesser clauses will present in the contract as the contract formed will be with regards to new basic inputs hence it will shorten the contract.


Related Solutions

QUESTION ONE [30] 1.1 For each of the following events, ceteris paribus, explain whether the production...
QUESTION ONE [30] 1.1 For each of the following events, ceteris paribus, explain whether the production possibility frontier shifts inward, shifts outward or remains unchanged. Use a single diagram to moti vate your answer. 1.1.1 The discovery of coal. (3) 1.1.2 Training for workers that increases the amount of a good that can be produced per worker. (3) 1.1.3 A shift in preference for one good compared to the other good. (3) 1.1.4 Invention of a new process of production...
Ceteris paribus, what would happen to a standard collusive agreement under oligopoly given each of the...
Ceteris paribus, what would happen to a standard collusive agreement under oligopoly given each of the following situations? In each blank, write either “strengthen” or “weaken”.      Each blank is worth 1 point.             a) the barriers to entry for the industry are incredibly weak                                     _______________________________________________             b) each firm produces a homogeneous product                                     _______________________________________________             c) each firm has an identical cost structure                                     _______________________________________________             d) there is a very large number of firms in the...
Ceteris paribus, a decrease in the demand for soda leads to:
Ceteris paribus, a decrease in the demand for soda leads to: A a decrease in the price of soda and a decrease in producer surplus. B a decrease in the price of soda and an increase in producer surplus. C an increase in the price of soda and a decrease in producer surplus. D an increase in the price of soda and an increase in producer surplus.
Assume cattle are raised for both meat and hides. Ceteris paribus, how would a rise in...
Assume cattle are raised for both meat and hides. Ceteris paribus, how would a rise in the demand for meat affect the price of hides? Group of answer choices It would lower the price of hides. It would raise the price of hides. Here are four statements about how people’s expectations of future prices affect what they do in the current period. I           If both buyers and sellers expect the price to rise next period, the price would rise in...
ECO - 252 - Macroeconomics 1. In each of the following cases, Ceteris Paribus, specify what...
ECO - 252 - Macroeconomics 1. In each of the following cases, Ceteris Paribus, specify what happens to the unemployment rate (increases, decreases, or remains the same) and to the labor force participation rate (increases, decreases, or remains the same). a. Anna loses her job but does not look for another one because she decides to go back to school. b. Matt quits his current job to start a new job immediately. c. Linda has just graduated with a Bachelor's...
Graphically illustrate how each of the following events, ceteris paribus, will affect the competitive market. (Start...
Graphically illustrate how each of the following events, ceteris paribus, will affect the competitive market. (Start new graph for each question.) Your diagrams must include competitive market equilibrium and post-government intervention: prices, quantities, consumer/producer/total surpluses, and dead-weight-losses. A price ceiling is imposed on rental apartments A price floor in form of minimum wage. Solar panels are subsidized. An excise tax is placed on sugary drinks.
Illustrate the impact on equilibrium price and equilibrium quantity for each scenario listed below, ceteris paribus...
Illustrate the impact on equilibrium price and equilibrium quantity for each scenario listed below, ceteris paribus (also, treat each part separately). In each blank, write “increase”, “decrease”, or “indeterminate”. a) Suppose Frosty Cola is a normal good. Assume that consumer income decreases at the same time the number of producers of Frosty Cola decreases.             Equilibrium Price _______________      Equilibrium Quantity _______________ b) Suppose Zazzy Cola is an inferior good. Assume that consumer income decreases at the same time the number...
Ceteris paribus, people save 25% of additional dollars. How much would the government have to spend...
Ceteris paribus, people save 25% of additional dollars. How much would the government have to spend to close a $400 GDP gap? Explain
1,Ceteris paribus, which countries would you expect to rely MORE on foreign trade as a percentage...
1,Ceteris paribus, which countries would you expect to rely MORE on foreign trade as a percentage of their economic activity? A larger countries, like the US. B smaller countries, like Sweden 2. An economy’s net exports always equals (choose one or both) A the difference between its saving and its investment B its trade balance 3. An economy’s trade balance always equals (choose one or both) A net capital outflow B net foreign investment
people with a higher opportunity cost of time are more willing, ceteris paribus, to pay a...
people with a higher opportunity cost of time are more willing, ceteris paribus, to pay a higher money price for goods that save time than people with a lower opportunity cost of time. First, provide an example of a product where an important part of the true cost of the product is the time price. Can you think of something that seems to be a bargain at first because of its low money price, but that isn't as much of...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT