In the principal-agent relationship, the principal is
A) the person who is placed in control over resources that are not his own and agrees to compensate the resource owner in the event of outcomes that do not satisfy the resource owner.
B) the person who places his resources in professional hands in exchange for the professional's promise to act on the resource owner's behalf.
C) the owner of a resource that has hired a third party to act in the best interest of that third party.
D) the person who is placed in control over resources that are not his own, with a contractual obligation to use these resources in the interests of some other party.
B
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In the above figure, what is the marginal cost of the 8th pizza?
A) $1.50 B) $12 C) $6 D) $96 E) 8 pizzas
Which of the following is an example of a transaction that is made even though complete information is not possible?
A. Joe buys a puppy in hopes that the puppy will be his hiking companion for the next 20 years. B. Alex buys house insurance and has never filed a claim. C. Mike saves his money by putting it in a mutual fund. D. All of these are examples of transactions that must be made with incomplete information.
According to the following graphs, what is Y1?
The price of Y is $15 per unit.
A. 20 B. 12 C. 25 D. 15 E. none of the above
Incomes of U.S. farmers tend to be boosted by:
A. Very good harvests on farms abroad B. Economic weakness in Europe and Southeast Asia C. Increased protectionism in farm policies abroad D. A depreciation of the U.S. dollar