You own a car dealership and pay all of your sales people a flat salary. As a result, they don't work very hard to generate sales. This is an example of
A. logrolling.
B. moral hazard.
C. adverse selection.
D. an externality.
Answer: B
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Assuming the firm in the graph shown is producing Q1 and charging P3 in the long run, then the deadweight loss is
These are the cost and revenue curves associated with a firm.
A. Area A.
B. Area B.
C. Area C.
D. There is no deadweight loss.
One explanation for the growth in the U.S. economy over the last 100 years is:
A. a large increase in human capital. B. a rapid decline in human capital. C. a small, incremental increase in human capital. D. Human capital was not the cause of growth in the United States over the last 100 years.
Which one of the following individuals would be classified as structurally unemployed?
A. Joe was laid off by by his construction company because there was a reduction in the number of houses built in the winter. B. Fay lost her job in early January when the Christmas store where she worked was closed. C. Gail lost her job with the state because there was a reduction in the state budget. D. Johny lost his job at a Sears department store, which had lost considerable business to online shopping services.
The reason that diamonds cost more than water is
A. most consumers consume little water. B. diamonds are more beautiful than water. C. the marginal utility of each diamond a consumer purchases is quite high due to the small amount of diamonds that most consumers purchase. D. water is a necessity.