External benefits are those that accrue:
A. indirectly to the decision maker of a market exchange.
B. to the government without its direct intervention.
C. without compensation to someone other than the person who caused it.
D. directly to the decision maker of a market exchange.
Answer: C
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To reduce moral hazard, a firm may
A) pay workers at a piece rate. B) offer a year-end bonus if firm profits are up. C) offer stock options. D) All of the above.
The future value of a deposit is:
A. PV * (1 + r) * n, where r = interest rate, n = periods, and PV = present value. B. PV * (1 + r)n, where r = interest rate, n = periods, and PV = present value. C. PV * rn, where r = interest rate, n = periods, and PV = present value. D. PV/(1 + r)n, where r = interest rate, n = periods, and PV = present value.
In economics, secondary effects refer to the
A) immediate and highly visible intended consequences of an action or policy change. B) value of the goods that an individual must give up as the result of choosing an alternative. C) indirect effects that often result from an action or policy change. D) value of a good derived by the consumer.
Government assistance to workers whose employment prospects have worsened is called:
A. the minimum wage. B. worker mobility payments. C. transition aid. D. social security.