Incentive problems are usually
A. smaller when the decision rights are placed lower in the organization.
B. large regardless of where the decision rights are placed.
C. larger when the decision rights are placed higher in the organization.
D. larger when the decision rights are placed lower in the organization.
Answer: D
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While you were an intern you bought 5 packages of hot dogs a month. After acquiring a full-time job with a considerable higher salary, you stopped purchasing hot dogs. For you, hot dogs are
a. Complementary good b. Normal good c. Inferior good d. Substitute good
When a tax is imposed, some of the lost surplus becomes tax revenues and the rest is:
A. transferred to consumers. B. transferred to producers. C. transferred to recipients of government services. D. simply lost.
When an economy is in a recession,
a. strong demand for investment funds will push interest rates upward. b. strong demand for resources will push the prices of resources upward. c. the real interest rate will tend to rise. d. the unemployment rate will rise above its natural rate.
Labor income includes:
A. interest, dividends, and rent. B. wages, salaries, and earnings of the self-employed. C. payments to owners of factories, machines, and buildings. D. profits, royalties, and rent.