The moral hazard associated with managers whose productivity is difficult to quantify can be decreased with
A) piece-rate contracts.
B) year-end bonuses.
C) decreased wages.
D) adverse selection.
B
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Among the factors that create a deadweight loss and inefficiency are
A) minimum wages, but not taxes. B) rent ceilings, but not taxes. C) taxes, but not minimum wages or rent ceilings. D) minimum wages, rent ceilings, and taxes.
The demand for Healthy Bars, a health snack bar, is Qd = 10 - (2 × P) and Healthy Bars has a constant average cost of $3 per snack bar. If Healthy Bars wants to package their bars to create an all-or-nothing offer and puts the profit-maximizing number of bars into each package and charges the profit-maximizing price for the package, what is their profit?
A) $16 B) $12 C) $6 D) $4
All of the following affect the demand elasticity for labor EXCEPT
A) final product income elasticity. B) ease of substitution of labor for other inputs. C) final product price elasticity. D) labor costs as a portion of total cost.
John takes 10 minutes to iron a shirt and 20 minutes to type a paper. Harry takes 10 minutes to iron a shirt and 30 minutes to type a paper. Which of the following statements is correct?
a. Harry has a comparative advantage in ironing.
b. Harry has a comparative advantage in typing.
c. Harry has an absolute advantage in typing.
d. Harry has an absolute advantage in ironing.
e. Neither can gain from specialization and exchange.