Quizizz--Economics (Module 2--Element 1.5)--Transaction Costs

What are transaction costs?

• Costs associated with searching for trading partners and negotiating trades

• Costs of producing goods

• Costs of advertising products

• Costs of storing inventory

Which of the following is NOT a reason for high transaction costs?

• Physical obstacles like mountains

• Lack of information

• Political obstacles like taxes

• High production costs

How can transaction costs be reduced?

• By increasing taxes

• By investing in roads and communication

• By raising product prices

• By limiting trade partners

What is the impact of high transaction costs on trade?

• They increase the potential gains from trade

• They reduce the potential gains from trade

• They have no impact on trade

• They make trade more efficient

What is the primary role of middlemen in trade according to the text?

• Increase the price of goods

• Reduce transaction costs

• Provide direct services to consumers

• Manufacture goods

Which of the following is an example of a middleman mentioned in the text?

• Farmer

• Manufacturer

• Grocer

• Consumer

How has technology impacted transaction costs in recent years?

• Increased transaction costs

• Made transaction costs irrelevant

• Reduced transaction costs

• Had no impact on transaction costs

What is one benefit of middlemen in the context of trade?

• They increase the price of goods

• They complicate the buying process

• They reduce transaction costs

• They eliminate the need for technology

What effect have reductions in transaction costs had on trade and living standards?

• Decreased the volume of trade and lowered living standards

• Increased the volume of trade and enhanced living standards

• Had no effect on trade or living standards

• Decreased the volume of trade but enhanced living standards

The price of a good will tend to fall when

• there is excess supply of the good.

• there is excess demand for the good.

• demand for the good increases.

• the supply of the good decreases.