Among the reasons for high CEO pay are all of the following EXCEPT
A. a corporate board might make the CEO job higher-paying in order to entice lower-level corporate officers to put forth maximum effort as they try to achieve the top position.
B. paying CEOs with stock in the company will motivate the CEO to do what is in the best interests of the shareholders, and these stock packages might be very large to motivate more.
C. shareholders might benefit from the prestige of investing in a company with a CEO who enjoys a high standard of living.
D. the people who are capable of doing the work required of a top corporate officer are relatively scarce.
Answer: C
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In a two-period model, holding everything else constant, an increase in future taxes
A) unambiguously increases the current account surplus. B) unambiguously decreases the current account surplus. C) has an uncertain effect on the current account surplus. D) has no effect on the current account surplus, as long as Ricardian equivalence holds.
Which of the following statements about private and social costs is TRUE in the presence of negative externalities created by pollution?
A) Competitive market produces excessive pollution. B) The optimal amount of pollution is zero. C) Social costs exclude externalities. D) Social producer surplus exceeds private producer surplus.
Figure 13-3
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Oligopolist A cuts price in an attempt to enlarge his share of the market. His competitors retaliate with identical price cuts. In this case, in Figure 13-3, oligopolist A will move from point A to which point?
A. B B. C C. D D. E
What complex set of free-trade area regulations prohibits non member country imports to a high-tariff member country via a low-tariff member country?
a. environmental certification b. rules of origin c. health and safety standards d. a codified trade agreement