An efficient allocation of risk among employees and owners must:
A. recognize that pooling of risks is never appropriate.
B. recognize that employees have full control over their output.
C. take into account that performance-based incentives are the sole important component of an employee's salary.
D. take into account that attitudes toward risk differ among different people.
Answer: D
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The change in total cost that results from the production of one additional unit is called:
A. marginal revenue. B. average variable cost. C. marginal cost. D. average total cost.
The government borrows money to cover budget deficits by
A) purchasing bonds. B) petitioning the International Monetary Fund. C) selling bonds. D) filling out a loan application at Citibank.
Explain how each of the following events would affect the short-run aggregate supply curve
a. A decrease in the price level b. A decrease in what the price level is expected to be in the future c. A price level that is currently lower than expected d. An unexpected decrease in the price of an important raw material e. A decrease in the labor force