In the principal-agent relationship between a bank manager and a bank teller, the manager is
A) an agent, as is the teller.
B) an agent and the teller is a principal.
C) a principal and the teller is an agent.
D) a principal, as is the teller.
C
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To fight inflation, the government may
A. decrease aggregate demand, which will also lead to lower unemployment rates. B. increase aggregate demand, which will also lead to lower unemployment rates. C. increase aggregate demand, which will also lead to higher unemployment rates. D. decrease aggregate demand, which will also lead to higher unemployment rates.
In the above figure, the maximum number of units that 4 workers can produce is
A) 5 units. B) 10 units. C) 15 units. D) more than 15 units.
Refer to the above figure. If the government imposes a price floor of $60
A) the quantity of goods that will be traded is 100. B) the quantity of goods that will be traded is 200. C) the quantity of goods that will be traded is 150. D) the quantity of goods that will be traded is 0.
John is trying to decide whether to expand his business or not. If he continues his business as it is, with no expansion, there is a 50 percent chance he will earn $100,000 and a 50 percent chance he will earn $300,000. If he does expand, there is a 30 percent chance he will earn $100,000, a 30 percent chance he will earn $300,000 and a 40 percent chance he will earn $500,000. It will cost him $150,000 to expand. If John were to expand, which of the following is true?
A. John's expected earnings are $50,000 less than if he didn't expand. B. John can expect to earn $120,000 more by expanding, but that is less than the cost of expansion, $150,000. C. John can expect to earn $120,000 more by expanding and therefore made the most profitable decision. D. All of these statements are true.