In reality, the wage-gap between two countries will:
A. Always be reduced to zero through migration
B. Be greater than zero because of migration costs
C. Always be sufficient to cover the marginal costs of migration
D. Be smaller the greater the distance between the countries
B. Be greater than zero because of migration costs
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A negative cross elasticity indicates that two goods are complements.
Answer the following statement true (T) or false (F)
The model of perfect competition is most likely to apply to a market where
a. it is difficult for existing firms to exit the market b. there are a few buyers, and they are uninformed about the degree of product standardization c. there are many existing sellers, but it is difficult for new sellers to enter the market d. one dominant seller must negotiate with one dominant buyer e. there are many sellers, and they produce a standardized product
To understand how the price of a good is determined in a free market, one must account for the desires of:
A. sellers. B. governmental agencies. C. buyers. D. buyers and sellers.
When considering the running of a corporation, there is a principal-agent problem between shareholders and the CEO because
A. shareholders cannot observe all of the CEO's decisions. B. shareholders require the firm to pay a dividend. C. shareholders sign confidentiality agreements. D. the CEO is paid in part with stock options. E. shareholders want the firm to maximize the firm's share price while the CEO wants to maximize profits.