Which of the following payment plans does NOT give an incentive to a manager to stop shirking?
A. Flat salary regardless of firm profits
B. Flat salary with additional pay based on profits of the firm
C. Pay schedule based solely on profits earned by the firm
D. None of the statements is correct.
Answer: A
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A market equilibrium:
A. leaves unexploited opportunities for individuals. B. exploits all gains achievable through collective action. C. leaves no unexploited opportunities for individuals. D. maximizes total economic surplus.
Policy directives used by the Fed to moderate swings in the business cycle are considered
a. moderating fiscal policy b. countercyclical monetary policy c. accelerating monetary policy d. reserve requirement rates e. federal funds policy
Total revenue is:
a) The profit a company earns from the sales of goods. b) Equal to revenues minus the costs of production. c) The price of a product times the quantity sold in a given time period. d) The additional revenue earned from the sale of one more unit.
Related to the Economics in Practice on page 155: You own a truck and use it to deliver merchandise to retailers and hire a driver to make such deliveries. The speed at which you instruct the driver to drive depends on
A. neither the driver's wage nor the price of gasoline. B. the driver's wage and the price of gasoline. C. the driver's wage only. D. the price of gasoline only.