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.
D
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If the Fed is concerned about inflation, its actions ________ long-term interest rates so that investment ________ and net exports ________
A) lower; increases; decrease B) raise; decreases; decrease C) lower; increases; increase D) raise; increases; increase E) lower; decreases; decrease
If University of Nebraska increased its season football ticket sales from 43,000 to 47,000 when it lowered price from $350.00 to $300.00, then its demand for season tickets must be ________ because total revenue ________ when the price was lowered
A) elastic; decreased B) elastic; increased C) inelastic; decreased D) inelastic; increased
If a competitive firm's marginal costs always increase with output, then at the profit maximizing output level, producer surplus is
A) zero because marginal costs equal marginal revenue. B) zero because price equals marginal costs. C) positive because price exceeds average variable costs. D) positive because price exceeds average total costs. E) positive because revenues are increasing faster than variable costs.
If demand is unit elastic, then a 10 percent increase in price will lead to a 10 percent drop in quantity demanded
a. True b. False Indicate whether the statement is true or false