Assume that originally u. s. gdp is $10 trillion, but that the economy is closed and there are no imports or exports. the nation of twinsylvania begins selling high-quality yard tractors in the united states but charges a very low price—say, $70 each. assume that u. s. consumers use this opportunity to buy yard tractors from twinsylvania instead of u. s.-produced yard tractors, and that spending on other u. s. goods does not change.

Banana computers has decided to procure processing chips required for its laptops from external suppliers instead of manufacturing them in their own facilities. how will this decision affect the firm? a. the firm will be protected against the principal-agent problem. b. the firm's administrative costs will be low because of necessary bureaucracy. c. the firm will have more flexibility in purchasing and comparing prices of goods and services. d. the firm will have high-powered incentives, such as hourly wages and salaries.