Production inefficiency is most likely to occur when the principal has more information about work performance than the agent does
Indicate whether the statement is true or false
False. It is when the agent has more information that production inefficiency is more likely to occur. The agent is able to shirk without being detected by the principal.
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A tax structure is progressive as long as a person who has more income pays
A. the same rate of tax than someone who has less income. B. a higher rate of tax than someone who has less income. C. the same tax than someone who has less income. D. more tax than someone who has less income.
When property rights are assigned and transactions costs are low,
A) all costs and benefits are taken into account by the transacting parties so the transaction is efficient. B) externalities will result in market failure. C) the marginal social benefit curve shifts leftward and the marginal social cost curve does not shift. D) the marginal social cost curve shifts rightward and the marginal social benefit curve does not shift. E) the marginal social cost curve shifts rightward and the marginal social benefit curve also shifts rightward.
In a study of college yearbook photos, researchers found that:
a. An inauthentic smile by males meant they would be unhappy in life b. Women with the Pan Am (fake) smile were just as happy in life as women with the Duchene (genuine) smile c. Smiling type makes no difference d. A genuinely smiling woman (with the Duchene smile) is more likely to be married, stay married, and to experience more personal well-being than a woman with the fake smile.
Suppose Sandy is moving to Washington, D.C. for a year-long job working for the government. She has decided to rent one of two apartments. Both apartments cost $1,000 per month and are identical except for the fact that one is a monthly rental and the other has a year-long lease. Which of the following best explains why Sandy might pick the year-long lease?
A. There is no good reason for Sandy to pick the year-long lease because the monthly rental allows her more flexibility. B. Sandy might worry that if she picks the monthly rental, she will get kicked out if the landlord finds someone willing to pay more than $1,000 per month. C. Sandy might worry that if she picks the monthly rental, she will have to move if she finds another apartment for less than $1,000 per month. D. There is no good reason for Sandy to pick the year-long lease because the two apartments are identical.