Parties to the contract prefer to keep the actual agreement incomplete when:
a. they have conflicting terms and conditions.
b. they are large in count.
c. the economic value of the contract is low.
d. the cost of negotiation is high.
D
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A rent ceiling is
A) fair, because it helps all renters. B) fair, because it insures that low-income families can rent apartments. C) fair, because it helps all landlords. D) unfair. E) fair, because it helps more renters than it harms.
Suppose the United States spends more on foreign goods and services than foreigners spend on our goods and services and the United States sells no foreign assets. Then the
A) United States must borrow an amount equal to national saving. B) United States must borrow an amount equal to imports minus exports. C) rest of the world may or may not finance the U.S. trade deficit. D) United States must borrow an amount equal to consumption expenditure plus investment.
The demand for a cup of coffee is ______________ than is the demand for a dinner at a fancy restaurant because _________________.
A. more price elastic; a cup of coffee requires a smaller portion of one's income. B. less price elastic; a cup of coffee requires a smaller portion of one's income. C. less price elastic; a cup of coffee is more of a luxury. D. more price elastic; a cup of coffee is more of a luxury.
Consider the salary of Mary Sue Nelson, a sales agent for Plain Truth Advertising. She has an effort cost of C = e2 and a reservation wage of $1,500 so that wage package is W = 1,500 + 0.2 Q where the CEO sets the incentive at 0.2 and Q = 200 e. If the CEO increases the incentive from 0.2 to 0.25, what happens to Nelson's effort? Will profits rise or fall?
What will be an ideal response?