Suppose a plaintiff hires a lawyer to represent her in a court case. Under which of the following contracts is efficiency in risk bearing assured?
A) The lawyer is paid by the hour.
B) The lawyer receives a share of the settlement.
C) The lawyer receives a fixed fee.
D) It is impossible to determine without the degree of risk aversion for each.
D
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Equilibrium expenditure is
A) the amount of aggregate expenditure at which aggregate planned expenditure exceeds real GDP. B) the amount of aggregate expenditure at which aggregate planned expenditure equals real GDP. C) when unplanned inventory change is positive. D) when unplanned inventory change is zero or negative. E) the amount of aggregate expenditure at which aggregate planned expenditure is less than real GDP.
The most important determinant of the elasticity of supply is
A) whether the good is a durable good or a nondurable good. B) the price of the good. C) the time period firms have to adjust to the new price. D) the proportion of the good in the budget of consumers.
The Department of Justice could use the cross-price elasticity between products sold at Staples and Office Max to show that the firms are very similar.
Answer the following statement true (T) or false (F)
A 2 percent increase in the price of wheat leads to a 2 percent decrease in the quantity demanded of rice. The absolute price elasticity of demand is
A. 0.1. B. 6. C. 3. D. 1.