Why is the manager of a company typically not the same person as an entrepreneur?
What will be an ideal response?
An entrepreneur is usually the one that assumes the risk of the firm. Often the management of the company can be someone that the entrepreneur can hire who does not have to exhibit risk-taking qualities.
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One condition for the first welfare theorem to hold is that there are no externalities. Can this condition be re-phrased as "all property rights have been established"? And how does this justify a wide range of what we see government doing?
What will be an ideal response?
The concept of economic rent can be applied to
A) land only. B) land and natural resources only. C) land, natural resources, and paintings by dead masters only. D) any resource that cannot be replicated exactly.
Explain how the law of comparative advantage does benefits developing countries.
What will be an ideal response?
The money supply will grow faster through deposit creation when the required reserve ratio is:
A. high and banks hold excess reserves. B. high and banks cannot find good customers to lend to. C. low and banks are able to lend out all of their excess reserves. D. low and banks are unable to loan out all of their excess reserves.