How did the advent of the modern corporation reduce the likelihood that a firm's goal is to maximize profit? What has replaced this goal?
The corporation separates owners—stockholders—from decision makers. Although stockholders typically
want the firm to maximize profit, the managers may have other goals. They may choose, instead, to
maximize sales or to safeguard the viability of the firm. John K. Galbraith and Richard Lester believe that
managers seek to preserve the managerial class, even at the expense of profit.
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
If W is the nominal wage rate, N is the quantity of labor, P is the price level, and Y is real income, then labor's share in national income is
A) WN - PY. B) WP/YN. C) WN/PY. D) PY - WN.
Which of the following will most likely result from an unanticipated decrease in aggregate supply due to unfavorable weather conditions in agricultural areas?
What will be an ideal response?
When total utility is at a maximum, marginal utility is:
A. zero. B. positive. C. negative. D. one.