If a principal and agent have an efficient contract, then
A) one of them must be more risk-averse than the other.
B) neither can be made better off without harming the other.
C) they must have symmetric information.
D) the principal bears more of the risk.
B
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Refer to Table 4-11. The equations above describe the demand and supply for Chef Ernie's Sushi-on-a-Stick. The equilibrium price and quantity for Chef Ernie's sushi are $60 and 20 thousand units. What is the value of consumer surplus?
A) $100 thousand B) $200 thousand C) $600 thousand D) $800 thousand
To maximize its profit, a monopolistically competitive firm
a. takes the price as given and chooses its quantity, just as a competitive firm does. b. takes the price as given and chooses its quantity, just as a colluding oligopolist does. c. chooses its quantity and price, just as a competitive firm does. d. chooses its quantity and price, just as a monopoly does.
An increase in both the equilibrium price and the equilibrium quantity of DVD players is best explained by:
A. a decrease in the supply of DVD players. B. an increase in the supply of DVD players. C. a decrease in the demand for DVD players. D. an increase in the demand for DVD players.
In the above table, if the quantity sold by the firm rises from 6 to 7, its marginal revenue is
A) $15. B) $30. C) $90. D) $105.