What is an agency relationship? What are agency problems?
What will be an ideal response?
An agency relationship consists of an agreement under which one party, the principal, engages another party, the agent, to perform some service on the principal's behalf. Agency problems refer to the difficulties in aligning the incentives of the principal and the agent. As an example, agents may have an incentive to cheat and the principal may not have a foolproof way of controlling this.
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A decrease in wealth would shift the:
A) aggregate demand curve rightward. B) aggregate demand curve leftward. C) aggregate supply curve rightward. D) aggregate supply curve leftward.
How do exchanges seek to reduce default risk in the futures market?
What will be an ideal response?
Fixed costs are best defined as:
a. costs that do not vary with output. b. costs that are at a minimum when output approaches the firm's capacity. c. the amount that one more unit of output adds to total costs. d. costs that decline as output increases.
The monopolist chooses to produce:
A. at a higher quantity than the perfectly competitive firm. B. where marginal cost equals marginal revenue. C. at an efficient outcome. D. at a cost that is equal to a competitive one.