As price falls along a downward sloping ordinary demand curve (in the x1, p1 plane), consumer utility will: a. rise if the income effect is less than the substitution effect. b. fall if the income effect is greater than the substitution effect. c. rise if the income effect is greater than the substitution effect. d. rise if the income effect is less than the substitution effect.

Adrawback of short-term contracting as an alternative to making a component in-house is thata. it is the most-integrated alternative to performing an activity so the principal company has no control over the agent. b. the supplying firm has no incentive to make any transaction-specific investments to increase performance or quality. c. it fails to allow a long planning period that individual market transactions provide. d. the buying firm cannot demand lower prices due to the lack of a competitive bidding process.