What are some mechanisms for encouraging ethical behavior?
What will be an ideal response?
Market mechanisms like repeat sales, warranties, third-party monitors, disclosure, and ownership structure encourage ethical behavior. Repeat sales are crucial for self-enforcing agreements. Warranties also provide some confidence about quality assurance. The commitment to full disclosure is also important for trade in market. Ownership structures are also important in managing ethical behavior. Franchises are setup for services like fast food and lawn care that have repeat business and the main organization concentrates on building the brand image. Franchises are usually not setup for businesses that deal with one-time purchases.
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After Hurricane Katrina devastated parts of Mississippi and New Orleans in 2005, we can be sure that the production possibilities frontier for that area temporarily
A) shifted inward, toward the origin. B) shifted outward, away from the origin. C) became flatter. D) became steeper.
In the long run, most economists agree that a permanent increase in government spending leads to
A) a decrease in private spending by less than the amount that government spending increased. B) a decrease in private spending by the same amount that government spending increased. C) no decrease in private spending. D) a decrease in private spending by more than the amount that government spending increased.
Which of the following is true regarding the relationship between returns to scale and economies of scope?
A) A firm experiencing economies of scope must also experience increasing returns to scale. B) Economies of scale and economies of scope must occur together. C) A firm experiencing increasing returns to scale must also experience economies of scope. D) There is no definite relationship between returns to scale and economies of scope.
Macrosoft is implementing a new research and design shop to integrate PC manufacturers' requirements for new computer software with Macrosoft's operating system. The process of integration usually requires five different kinds of software modification tasks, plus decisions about integrating these modifications. Discuss the problems of designing the new jobs in this research and design shop.
What will be an ideal response?