If a manager is not the owner, the manager:
A. does not receive the full benefit nor the full cost of his or her decisions.
B. bears the full cost of bad decisions.
C. receives the full benefit of good decisions.
D. None of the statements is correct.
Answer: A
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In Figure 1 below if the economy were at Y1 then we would expect there to be:
A. an increase in production since PAE < actual output.
B. an increase in production since PAE > actual output.
C. no change in production since PAE = actual output.
D. a decrease in production since PAE > actual output.
Which of the following is true of the market equilibrium in the presence of negative externalities? a. It is the intersection of the social cost curve and the demand curve
b. It is the intersection of the private cost curve and the demand curve. c. Net social welfare is maximized at the equilibrium. d. Market output is less than the socially optimal output at the equilibrium.
The economy has no international trade and no income taxes. In the short run, if government purchases were to decrease by $25 billion and the marginal propensity to consume was equal to 0.66 then real GDP would decrease by
A) $16.5 billion. B) $37.8 billion. C) $8.25 billion. D) $75 billion.
According to the Lucas supply function, in combination with the assumption that expectations are rational, change in government policy can affect real output only if
A. the policy change is a mix of both fiscal and monetary policy changes. B. expansionary policy changes are made. C. the policy change is correctly anticipated by the public. D. the policy change is a surprise.