Suppose that Jesse Eisenberg had been offered a bigger and better part in another movie and that to hire him for The Social Network, the producer had to double Jesse's pay
What incentives would have changed? How might the changed incentives have changed the choices that people made?
The higher pay would have increased Mr. Eisenberg's incentive to make The Social Network rather than the other movie and perhaps affected his choice to make The Social Network rather than the other movie. The higher pay would have increased the incentive of the producer to decrease the expense of other aspects of the movie so the producer might have chosen to reduce the pay of the other stars in the movie.
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Refer to Scenario 15.1. If the interest rate falls,
A) the present value of this contract will fall. B) the present value of this contract will be unaffected. C) the present value of this contract will rise. D) Jacob will be paid less than $10 million each year. E) Jacob will be paid more than $10 million each year as he can invest the money.
In the cartel model
a. firms believe that price increases result in a very elastic demand, while price decreases result in an inelastic demand for their products. b. each firm acts as a price taker. c. one dominant firm takes the reactions of all other firms into account in its output and pricing decisions. d. firms coordinate their decisions to act as a multiplant monopoly.
Which of the following will not affect the size of a nation's physical or human capital stock?
a. A new factory is constructed b. A new machine is installed in company's plant. c. An eighteen-year-old enrolls in college as a full-time student. d. All of the above affect the size of a nation's capital stock.
Fast food chains often behave like
A. cartels. B. covert colluders. C. open colluders. D. cutthroat competitors.