An increase in the supply of labor generates
A) increased unemployment.
B) lower wages.
C) an offsetting increase in the demand for labor.
D) a decrease in the quantity demanded of labor.
Answer: B
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The above figure shows the payoff matrix for two firms, A and B, selecting an advertising budget. The firms must choose between a high advertising budget and a low advertising budget. Firm A's dominant strategy
A) does not exist. B) is to do the opposite of firm B. C) is to select a high advertising budget. D) is to select a low advertising budget.
Stock options make managers who receive them have exactly the same goals as shareholders
Indicate whether the statement is true or false
When the Fed buys bonds and injects additional reserves into the banking system, this action will
a. place downward pressure on short-term interest rates. b. cause many decision makers to expect that the future rate of inflation will fall. c. place upward pressure on both short-term and long-term interest rates. d. place upward pressure on short-term interest rates and downward pressure on long-term interest rates.
The principal-agent problem:
A. is when the principal has more information than the agent. B. is when the principal and agent have the same objectives. C. is when the agent is tempted to put in more effort than the principal would like. D. is commonly seen in the employer-employee relationship.