Which of these is true of blockholders?
A. They add value to the corporation when they extract private benefits.
B. They should not be managers of the firm.
C. They participate more than small shareholders in the governance process because they internalize more of the benefits.
D. They are superior to institutional investors in their ability to reduce agency costs.
Answer: C
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Charging drivers with good records lower premiums than drivers with bad records is an example of an attempt by insurance companies to deal with the problem of
A) moral hazard. B) adverse selection. C) drunk driving. D) failure of policyholders to keep paying their premiums.
The market demand curve is derived by summing individual demand curves horizontally
a. True b. False Indicate whether the statement is true or false
The monopolist's marginal revenue curve lies below the demand curve because
a. the monopoly is not an efficient producer b. as the monopolist increases output, the price falls c. there is no account of implicit costs d. the monopolist's demand curve is the market demand e. the monopolist can charge the highest price possible
Political instability is an impediment to development mainly because it:
A. undermines both domestic and foreign investment in a developing country. B. creates cultural and social differences among groups in developing countries. C. produces excessive levels of domestic saving. D. redistributes income.