The market system works by getting each person, motivated by his or her own self-interest, to produce products for other people.
Answer the following statement true (T) or false (F)
True
You might also like to view...
Some firms provide stock options to managers as an incentive to work hard and increase the value of the firm. A typical option contract gives the manager the right to buy the firm's stock at a set price (known as the exercise price)
If the firm's stock value increases and moves above the exercise price, then the manager's option becomes more valuable. What is the potential problem with this incentive scheme? A) The incentive does not include a performance benchmark, so it cannot be optimal. B) There is a dynamic incentive problem --- the manager may focus too much on the firm's short-run stock value and not on actions that are in the best interest of the firm for the long run. C) The incentive value depends on the firm's stock value, which cannot be influenced by the amount of work or effort exerted by the manager. D) There are no problems with this incentive scheme.
There is a permanent underclass totaling about _____% of our population.
Fill in the blank(s) with the appropriate word(s).
The number of U.S. households with access to the Internet has grown is growing rapidly. Compared to 50 years ago, one would predict that when considering a major purchase, people today will gather:
A. more information because the Internet has lowered the cost of gathering information. B. less information because the Internet has increased the benefit of gathering information. C. less information because the Internet has lowered the cost of gathering information. D. more information because the Internet has increased the cost of gathering information.
Suppose the accompanying table describes the relationship between price and quantity demanded for a monopolist. QuantityPrice1$102$93$84$75$66$57$48$3The marginal revenue of the fifth unit of output is:
A. $2. B. $30. C. ?$2. D. $6.