A good salesperson can sell $200,000 worth of goods, while a poor one can sell only a smaller amount worth of goods. Job applicants know if they are good or bad, but the firm does not
A firm will offer job applicants a choice between a fixed salary of $20,000 or a 20% commission. Assume risk-neutral salespersons and no opportunistic behavior. Given that the firm wants to distinguish a prospective good salesperson from a poor one, what should be the sales amount of a poor salesperson? A) more than $150,000
B) less than $100,000
C) more than $100,000
D) $100,000
B
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Before 1980, most U.S. corporations raised funds
A) in U.S. stock and bond markets or in foreign capital markets. B) in U.S. banks or in foreign capital markets. C) in U.S. stock and bond markets or in U.S. banks. D) in U.S. and foreign banks.
In which situation would a monopolist be maximizing profit when it produces at an output where MC < MR?
a. none because when MC < MR, profit is not maximized b. when the barriers of entry are overcome so that other firms enter c. when costs keep falling as output increases d. when price increases as output increases e. when economic profit is greater than normal profit
When property rights are not well established,
a. private goods become public goods. b. markets fail to allocate resources efficiently. c. the distribution of private goods is unfair. d. government resources are used inefficiently.
News reports from the western United States occasionally report incidents of cattle ranchers slaughtering a large number of newborn calves and burying them in mass graves rather than transporting them to markets. Assuming that this is rational behavior by profit-maximizing "firms," explain what economic factors may influence such behavior