The threat of a corporate takeover is an ________ incentive that helps to mitigate the ________ principal-agent problem.
A. internal; manager-consumer
B. external; owner-consumer
C. external; owner-manager
D. internal; manager-worker
Answer: B
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A production function in which the inputs are perfectly substitutable would have isoquants that are
A) convex to the origin. B) L-shaped. C) linear. D) concave to the origin.
Which of the following is an example of a good with a highly elastic demand curve?
a. Pencils b. Books c. Bread d. Sports vehicles
Low levels of sales that cause low levels of investment spending is an example of a
a. vicious circle. b. virtuous circle. c. convergence circle. d. divergence circle.
A fundamental aspect of economics is to
A. analyze how choices are made. B. make sure that we always have sufficient resources. C. satisfy all our wants. D. ensure that every firm makes a profit.