For the firm, the major goal of profit sharing plans is to:
A. force workers to incur some of the business risk.
B. overcome the monopsony problem of having to pay higher wages to attract additional
workers.
C. overcome the principal-agent problem by better aligning the workers' interests with those of
the firm.
D. reduce total compensation payments.
Answer: C
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Refer to Figure 15-9. What is the difference between the monopoly's price and perfectly competitive industry's price?
A) The monopoly's price is higher by $3.50. B) The monopoly's price is higher by $13. C) The monopoly's price is higher by $21. D) The monopoly's price is higher by $9.50.
If the required reserve ratio was 25 percent, a bank that received currency deposits of $16,000:
a. could now issue $64,000 of new loans. b. could now issue $16,000 of new loans. c. could now issue $12,000 of new loans. d. could now issue $4,000 of new loans.
The consumption of an additional unit of a good provides additional satisfaction, which is called:
A. average utility. B. total benefit. C. marginal social benefit. D. marginal utility.
When the price of a good falls, consumers buy more of the good because it is cheaper relative to competing goods. This statement describes the:
A. consumer equilibrium effect. B. price effect. C. income effect. D. substitution effect.