Firms that anticipate hold-up, choose organizational or contractual forms
a. that give both parties the incentive to make relationship-specific investments
b. that give both parties the incentive to exploit each other's positions
c. that gives both parties an incentive to trade, even after the relationship-specific investments have been made
d. Both A&C
d
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The slope of the demand curve conveys all the useful information about elasticity.
Answer the following statement true (T) or false (F)
Borrowing to pay for long-lived capital expenditures makes sense as
A) the benefits are received in the current year so the burden of paying for them should be spread over many years. B) the benefits are received over many years so the burden of paying for them should be spread over many years. C) the benefits are received in the current year so the burden of paying for them should be paid in the current year. D) the benefits are received over many years so the burden of paying for them should be paid in the current year.
A necessary condition for a separating equilibrium when workers can use education as a signal of their ability is
A) the high-ability wage is larger than the sum of the degree cost plus the low-ability wage. B) the cost of a degree is larger than the low-skill wage. C) the high-ability wage is smaller than the low-ability wage. D) the high-skill wage is equal to the cost of a degree.
The long-run aggregate supply curve intersects the horizontal axis at the:
A. actual rate of inflation. B. potential level of output. C. expected rate of inflation. D. current level of output.