Explain why checks on principals might be necessary
What will be an ideal response?
Without checks, the employer (principal) might have the ability of exploiting an employee (agent) by claiming that he/she did not put forth the effort agreed upon, or by falsely reporting information such as profits. Since payments are made after work is completed it potentially puts the employee in a bad bargaining position. An inefficient contract might eliminate/mitigate such behavior.
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A demand curve shows the relationship between
a. price and quantity demanded b. the demand and supply schedules c. demand and supply equilibrium d. leakages and injections e. price and technology
Like the monopolist, the monopolistically competitive firm:
A. sets the price where marginal cost equals marginal revenue; the demand curve doesn't matter. B. is a price taker. C. faces a downward sloping demand curve. D. All of these statements are true.
When a government partially defaults its debt, a "haircut" of 20% means that
A) creditors receive 20% of what they owed. B) creditors receive 80% of what they owed. C) creditors receive 40% of what they owed. D) creditors receive 10% of what they owed.
How are goods manufactured in other countries creating jobs in the United States?
A. People whose jobs were outsourced are now discouraged workers. B. People who have lost jobs have more time to shop and therefore increase demand for goods. C. U.S. firms are specializing in managing the trade of these goods. D. Foreign countries are importing U.S. natural resources.