The principal-agent problem exists when
A. owners have an interest in making a profit.
B. owners of an asset and the managers of that asset are the same.
C. managers are dedicated to making owners a profit.
D. owners of an asset and the managers of that asset are the not the same.
Answer: D
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Accounting profit is
a. always less than economic profit b. never less than economic profit c. equal to economic profit if a normal profit is earned d. less than economic profit only when implicit costs are greater than explicit costs e. greater than economic profit only when implicit costs are greater than explicit costs
An increase in wages in the public sector is caused solely by increased labor productivity in that sector
a. True b. False Indicate whether the statement is true or false
If a commodity’s price is above its marginal cost, the market will tend to produce too much of the good.
Answer the following statement true (T) or false (F)
A person maximizes utility when he equalizes the ________ across products.
A. marginal utility B. total utility per dollar spent C. marginal utility per dollar spent D. total utility