CSUF ECON 315 CHAP 6 Test Questions
And Actual Detailed Answers 2025
Updated.
Spot Exchange - Answer an informal relationship between a buyer and seller in which neither
party is obligated to adhere to specific terms for exchange
contract - Answer a formal relationship between a buyer and seller that obligates the buyer
and seller to exchange at terms specified in a legal document.
Produce inputs internally(vertical integration) - Answer a situation where a firm produces the
inputs required to make its final product.
transaction costs - Answer costs associated with acquiring an input that is in excess of the
amount paid to the input supplier.
obvious transaction costs - Answer EX: cost of searching for a supplier
cost of negotiating a price
investments and expenditures required to facilitate exchange.
Hidden transaction costs - Answer specialized investment - Expenditure that must be made to
allow two parties to exchange but has little or no value in any alternative use.
Relationship-specific exchange-
A type of exchange that occurs when the parties to a transaction have made specialized
investments.
Types of specialized investments - Answer Site specificity.
Physical-asset specificity.
Dedicated assets.
Human capital.
Implications of specialized investments - Answer Costly bargaining.
And Actual Detailed Answers 2025
Updated.
Spot Exchange - Answer an informal relationship between a buyer and seller in which neither
party is obligated to adhere to specific terms for exchange
contract - Answer a formal relationship between a buyer and seller that obligates the buyer
and seller to exchange at terms specified in a legal document.
Produce inputs internally(vertical integration) - Answer a situation where a firm produces the
inputs required to make its final product.
transaction costs - Answer costs associated with acquiring an input that is in excess of the
amount paid to the input supplier.
obvious transaction costs - Answer EX: cost of searching for a supplier
cost of negotiating a price
investments and expenditures required to facilitate exchange.
Hidden transaction costs - Answer specialized investment - Expenditure that must be made to
allow two parties to exchange but has little or no value in any alternative use.
Relationship-specific exchange-
A type of exchange that occurs when the parties to a transaction have made specialized
investments.
Types of specialized investments - Answer Site specificity.
Physical-asset specificity.
Dedicated assets.
Human capital.
Implications of specialized investments - Answer Costly bargaining.
