Economists refer to the general problem of ________ as a principal-agent relationshi
A) moral hazard
B) adverse selection
C) negative externalities
D) pecuniary externalities
A
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Giuseppe's Pizza is a perfectly competitive firm. The firm's costs are shown in the table above. If the market price is $20, how much economic profit does the firm make?
A) $0 B) $12 C) -$20 D) -$10
A firm's short-run average cost curve is U-shaped. Which of these conclusions can be reached regarding the firm's returns to scale?
A) The firm experiences increasing returns to scale. B) The firm experiences increasing, constant, and decreasing returns in that order. C) The firm experiences first decreasing, then increasing returns to scale. D) The short-run average cost curve reveals nothing regarding returns to scale.
Which of the following claims is true at each point along a price-consumption curve?
A) Utility is maximized but income is not all spent. B) All income is spent, but utility is not maximized. C) Utility is maximized, and all income is spent. D) The level of utility is constant.
An increase in the price of corn will lead to
A) an upward (and leftward) movement along the demand curve for corn. B) a leftward shift in the demand curve for corn. C) a rightward shift in the supply curve for corn. D) an increase in the quantity of corn consumed.