In the presence of asymmetric information, a hire contract
A) achieves production efficiency.
B) can lead to opportunistic behavior on the part of the agent.
C) is impossible to write.
D) will result in the principal earning all of the profit.
B
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When drawn against the current wage, the current labor supply shifts to the right if
A) current taxes increase. B) future taxes decrease. C) firms make more profits. D) total factor productivity increases.
If Cruise the World is in tacit collusion with three smaller cruise firms and Cruise the World consistently makes price changes that the other three firms then also make, this is an example of ________ by Cruise the World.
A) a precommitment B) price leadership C) a meet-the-competition clause D) a meet-or-release clause
The economic system that has the benefit of cooperation among individuals but suffers from a lack of individual initiative that leads to greater production describes the:
a. market economy. b. command economy c. soviet economy. d. traditional economy.
The total of all planned production for the entire economy is known as
A. aggregate supply. B. aggregate demand. C. aggregate expenditures. D. aggregate inflation.