Mr. Adams owns a textile business. In order to deal with the principal-agent problem, Mr. Adams might offer his employees
A) incentive pay.
B) long-term contracts.
C) part- ownership.
D) all of the above.
D
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A product's price elasticity of demand is likely to be greater
A) if it only has a few substitutes. B) if consumers spend a small proportion of income on the product. C) the less time consumers have to adjust to price changes. D) if the product is a luxury good rather than a necessity. E) Both answers C and D are correct.
What best describes what happens to the share of income spent on food as income increases?
a. The share increases. b. The share decreases. c. The share stays the same.
What can be determined by looking at this production possibilities curve?
a. Studying longer will not improve the grade in economics.
b. It is not possible to get an A in both classes.
c. The highest attainable history grade is a B.
d. It takes less studying to get an A in history than in economics.
Monopolistic competition results in
A. Marginal cost pricing. B. Production efficiency. C. Allocative efficiency. D. The wrong mix of output.