Which of the following practices are, at least in part, attempts to reduce moral hazard problems?
a. The income of waiters and waitresses depends heavily on tips.
b. An employer pays below equilibrium wages because he thinks his employees are not working as hard as they could be.
c. The professors leaves the room to prevent cheating on exams.
d. Tenure professors are not supervised closely.
a
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The availability of vast stocks of natural resources is an example of a(n):
A) implicit cause of prosperity. B) explicit cause of prosperity. C) fundamental cause of prosperity. D) proximate cause of prosperity.
Answer the following statements true (T) or false (F)
1. The biggest disadvantage of a sole proprietorship is the lack of distinction between the business and the owner. 2. In a partnership, each partner’s liability is limited to his or her contribution to the partnership. 3. The board of directors has unlimited financial liability for the debts of the corporation. 4. A corporation can raise money by selling stock or bonds.
Refer to Figure 15-12. What is the amount of consumer surplus if, instead of monopoly, the industry was organized as a perfectly competitive industry?
A) $21 B) $124 C) $186 D) $332
McSweed Cleaning Co is a partnership between Tom McSweed and his wife's accountant. The accountant provided $40,000 in initial start-up capital (along with record keeping services) to Tom's provision of day-to-day staff coordination and back-breaking work. They recently shut down with $45,000 in debt after selling the business assets. For how much debt is each partner responsible?
a. $45,000 b. an equal share c. proportionate to their initial investment d. none e. $5,000 for Tom and $40,000 for the accountant