Agency problems appear in many settings within a firm. All of the following are examples, except which is NOT a good example of this problem?
a. Diversified stockholders are more enthusiastic on accepting business risks than are firm managers.
b. Firm managers receive cash bonuses based on the performance of the firm.
c. Employees sometime take items from the store in which they work.
d. Lenders to firms want the managers to invest in safe projects to protect their collateral in the project but managers want to invest in projects that will make a name for them and warrant promotion.
e. Firm managers sometime want to relax on the job.
b
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When a bank takes money that you put in your checking account and gives it to someone else, at a cost, for a period of time, it is said to be
A) making a loan. B) making a deposit. C) internalizing an externality. D) creating commodity money.
Which theory suggested that comparative advantage arises from differences in national factor endowments?
a. Mercantilism b. Heckscher-Ohlin c. Absolute Advantage d. Comparative Advantage
An official agreement with another country in which it agrees to import more from the United States is
A) a regional trade bloc. B) the quota system. C) a voluntary import expansion. D) a voluntary restraint agreement.
Suppose there is currently a tax of $50 per ticket on airline tickets. Buyers of airline tickets are required to pay the tax to the government. If the tax is reduced from $50 per ticket to $30 per ticket, then the
a. demand curve will shift upward by $20, and the effective price received by sellers will increase by $20. b. demand curve will shift upward by $20, and the effective price received by sellers will increase by less than $20. c. supply curve will shift downward by $20, and the price paid by buyers will decrease by $20. d. supply curve will shift downward by $20, and the price paid by buyers will decrease by less than $20.