In a very basic principal-agent model, output is contractible if:
A. the employee works independently and cannot game the performance measure.
B. the employee works in a team
C. it can be observed with some positive cost.
D. the employee produces many products.
Answer: A
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The social interest theory of regulation is that
A) regulators help producers maximize economic profit. B) regulation seeks to increase the government's revenue. C) regulation causes producers to produce at a point where they are earning normal profits. D) regulation seeks an efficient use of resources. E) regulation focuses on the consumers' interests and ignores producers' interests.
If the money supply grows 7% during the year, and people expected the money supply to grow by 5%, what happens to the short-run aggregate supply curve, according to the misperceptions theory?
A) It shifts down. B) It shifts up. C) It doesn't shift. D) It shifts down unless Ricardian equivalence holds, in which case it doesn't shift.
The TANF program was the result of _____
a. the New Deal b. the Great Society programs of President Johnson c. President Reagan's second term in office d. President Clinton's desire to end welfare as conventionally understood
Answer the following statements true (T) or false (F)
1) When making output decisions, managers of firms producing a joint product with fixed proportions need to pay attention to the separate prices of the joint goods. 2) If a firm is producing a joint product with variable proportions, if the price of one of the joint products changes, to maximize profits, managers must adjust both the total production of the jointly produced product and the products' proportions. 3) If a firm is producing a joint product and the price of one of the products increases, the marginal benefit of producing more of that product increases. 4) If a firm is producing a joint product with variable proportions, producing more of one product means producing more of the other product. 5) Because the decision involves the production of two goods, marginal analysis cannot be used to determine the profit-maximizing proportions of jointly produced products.