Question

A transaction cost are all of the following, but cost of finding potential investors (partners) cost of production (the direct costs of producing the good or service) O cost of enforcing an agreement cost of gathering information

Answer 1

Direct cost of producing good is not the transaction cost instead is the production cost. Rest all are transaction cost incurred to facilitate the economic trade like cost of finding partner,paperwork, gathering information.

In neoclassical theory all that leads to inefficient allocation of resources and resulting into net loss of economic values and hence in part 2 all the listed down are leading to inefficient allocation and are Market failure hence option 4 is correct

Externalities affect other parties without changing price hence option 1 is correct

Fees paid for the raw component is not an externaloty as externaloty affect the third party rest all affects the society as a whole by creating waste and pollution and hence are externalities. Option 1 is correct