Answer the following questions using the following economic principles discussed in class.

Trade offs, Opportunity costs, Decisions at the margin, Incentives

1. When should a firm buy from the market vis a vis when should a firm produce internally?

2. What kind of products can be purchased on the spot?

3. What kind of products are better off trade in long term contracts?

4. When would firms expand horizontally and when vertically?

Please explain to me the above situations.