Economists refer to the conflict between the interests of shareholders and the interests of top management as
A) a stock-equity problem.
B) a liability problem.
C) a principal-agent problem.
D) a financial intermediary problem.
Answer: C
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Suppose that the production function for the economy is: Y = AK1/4L3/4. Assume that A = 1,000, the capital stock is $32,000 billion, and the labor force is 120 million (or 0.120 billion) workers., The value of the marginal product of capital is
A) $0.0147. B) $0.0213. C) $0.0597. D) $0.25.
Refer to the above figure. The firm is currently producing at Q2. The firm should
A) reduce production. B) leave production as it is. C) increase production. D) shut down.
Which of the following would probably not be considered a natural monopoly?
a. a municipal water company b. the local telephone industry c. the cable television industry d. natural gas and electric companies e. the automobile industry
A positive statement is:
a. something good or desirable. b. a call for improvement. c. a statement of opinion. d. a statement testable by facts. e. a suggestion for policy.