In the principal-agent problem, the principal is:
A. a person who is the source of the problem.
B. a person who carries out a task on someone else's behalf.
C. a person who entrusts someone with performing a task.
D. a person who is in charge of an educational system.
Answer: C
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If consumers spend their money only on beef and vegetables, then the substitution effect of an increase in the price of beef would result in consuming ________ beef and ________ vegetables
A) more; more B) less; fewer C) more; fewer D) less; more
Critically evaluate the following statement. "The presence of risk and uncertainty poses a problem for the workings of the market."
What will be an ideal response?
Between 1870 and 1920, the U.S. labor force:
a. grew at about the same rate as the population. b. grew more rapidly than the population. c. fell despite rising population. d. grew at a slightly lower rate than the population.
Which is least accurate about foreign trade?
a. In the early 1900s, the most industrialized nations exported foodstuffs and raw materials to the least developed countries. b. After the Civil War, rapid improvements in communications, like the first successful transatlantic cable, lowered the price of trade. c. After the Civil War, rapid improvements in transportation, like the opening of the Suez Canal and developments of railroads, reduced the price of shipping. d. In the late 1800s and early 1900s the network of international trade assumed many of its modern characteristics.