QUESTION 3 As discussed in class, what problem arises when a firm's owners and operators are separate individuals: O a. firms tend to borrow more than otherwise O b. firms experience a situation known as incentive incompatibility O c. firms tend to experience greater liability O d. firms tend to earn greater profits than otherwise O e. answers b and c are both correct Of. answers a and d are both correct O g. answers a, b, c and d are all correct QUESTION 4 As discussed in class, a transaction cost is: O a. a cost associated with organizing and facilitating exchange O b. an explicit cost associated with making a transaction O c. an implicit cost associated with making a transaction O d. typically a fixed production cost that is incurred by firms O e. monetary cost associated with hiring additional variable factors of production