When does an incomplete contract prove beneficial?
A contract may remain incomplete because the expected benefits of greater completeness
do not cover the costs of drafting it. In some situations an incomplete contract can discourage opportunistic behavior. Incompleteness may also be helpful if at the time the parties draft the agreement they do not know how they can best react to certain contingencies.
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The IS curve shifts to the left when ________
A) autonomous consumption increases B) taxes increase C) autonomous investment increases D) all of the above E) none of the above
Frictional unemployment refers to:
A. people who are out of work and have no job skills. B. short periods of unemployment needed to match jobs and job seekers. C. people who spend relatively long periods out of work. D. unemployment related to the ups and downs of the business cycle.
The existence of a deadweight loss associated with a monopoly can be seen because
A) consumers are willing to pay more for the last unit of output than it costs to produce. B) the cost of the last unit produced is more than consumers are willing to pay for it. C) the producer surplus is larger than in a competitive market. D) None of the above.
Which of the following would be considered unemployed as part of normal labor market turnover?
i. Juliet, who was fired when the company where she worked went bankrupt in a recession ii. Hannah, who quit her job to find one that better suited her skills iii. Charlotte, who started looking for a job upon graduation from high school A) ii and iii B) i and ii C) i, ii and iii D) i and iii E) iii only