A principal-agent problem occurs when hiring workers to work for a firm because
A) workers' interests are not always the same as the interests of the owners of the firm.
B) workers do not respond to incentives.
C) the owners of a firm are always in a position to exploit the workers.
D) workers' interests are not important in the managerial decisions of the firm.
A
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The figure above shows the demand for and costs of producing Charlene's Chocolates. If Charlene's Chocolates is a monopoly that charges one price to all customers, then consumer surplus is ________ and it creates a deadweight loss of ________
A) $800; $400 B) $200; $100 C) $400; $200 D) $0; $200
The principle of comparative advantage explains specialization and trade among countries but not among individuals
a. True b. False Indicate whether the statement is true or false
In a democratic setting, debt financing is attractive to elected political officials because
a. it makes it possible for them to spend on current projects favored by their constituents without having to levy current taxes. b. it drives up interest rates, which encourages saving. c. it leads to higher taxes in the future, which will tend to slow economic growth. d. it makes the cost of government more visible, which will help voters allocate government spending more efficiently.
The minimum wage is an example of a
A) price door. B) price wall. C) price floor. D) price ceiling.