Which of the following are attempts to ease the principal-agent problem?
a. Stock Options.
b. Golden Parachutes.
c. Efficiency Wages.
d. All of the above.
d. All of the above.
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The "lemons model" predicts quality deterioration in the used-car market because
a. used cars require increasing maintenance. b. suppliers and demanders have different information about cars' quality. c. used cars are generally of a lower quality than new cars. d. people will usually buy new cars if they are available.
Which statement is true?
A. Scarcity is simply a lack of money. B. The United States' society has been so affluent in the last 50 years that scarcity is only a minor problem. C. The economic problem refers to the problem of poverty. D. If scarcity did not exist there would be no need to economize.
Refer to Figure 6.6, which shows a market for taxi medallions. If the number of taxi licenses is reduced from Q2 to Q1:
A. the gain in consumer surplus equals the loss in producer surplus. B. the gain in producer surplus equals the loss in consumer surplus. C. the gain in consumer surplus is greater than the loss in producer surplus. D. the gain in producer surplus is smaller than the loss in consumer surplus.
What information will police applicants not need to furnish during recruitment?
A) drug history B) criminal activity C) political affiliation D) past traffic violations