Under which one of the following contracts does an agent have the least incentive to behave opportunistically?
A) The agent pays a fixed fee to the principal for the right to all future payoffs.
B) The agent works for the principal on an hourly basis.
C) The agent receives a share of the profit.
D) The agent works for the principal on a per unit basis.
A
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The demand for a good is elastic if
A) an increase in its price results in an increase in total revenue. B) a decrease in its price results in a decrease in total revenue. C) an increase in its price results in a decrease in total revenue. D) the good is a necessity.
As a result of the 1986 Tax Reform Act, in 1988 some high-income taxpayers had lower marginal tax rates than middle-income taxpayers
a. True b. False
Stanley Jevons, an economist in the nineteenth century, noted a high correlation between economic prosperity and sunspots. Based on this observation he developed a "sunspot theory" of how the economy operated. We now know that Jevons
A) committed the ceteris paribus error. B) committed the fallacy of composition. C) was confusing causality. D) showed good reasoning for the nineteenth but not the twentieth century
A decline in the quantity of real output demanded along the aggregate demand curve is a result of a(n):
a. Decrease in the price level b. Decrease in the level of income c. Increase in the level of income d. Increase in the price level