A principal-agent problem occurs when
a. people are "fooled" by high absolute wages offered by employers.
b. insurance increases people's willingness to take risks.
c. an employer cannot fully monitor the employee's work.
d. a highly productive worker is unable to earn any rent.
c. an employer cannot fully monitor the employee's work.
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If the graph shown represents Stella's budget constraint, and she has income of $48 to spend on these two items, Stella could choose which consumption bundle?
A. One pair of earrings and seven hairbands
B. Four pairs of earrings and eight hairbands
C. Three pairs of earrings and six hairbands
D. Two pairs of earrings and four hairbands
A tax on all forms of income will
a. lower the effective rate of interest on savings. b. have no effect on savings. c. enhance social welfare because the benefits will outweigh the costs. d. enhance the incentives to save.
Is it possible that deficits do not burden future generations?
When disposable income is 4000, APS is about
A. .45.
B. .34.
C. .23.
D. .12.