If an economist states that not enough of a good is being produced, she usually means that
A) not everyone can afford the good.
B) price exceeds marginal cost.
C) consumer surplus equals zero.
D) at equilibrium, some people who still wish to sell the good cannot find a buyer.
B
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A nonmonetary opportunity cost is
A) an explicit cost. B) a direct cost. C) an implicit cost. D) an accounting cost.
To solve the principle agency problem, which of the following questions should you ask a. Who is making the bad decision?
b. Does the decision maker have all the relevant information? c. Does the decision maker have the incentive to make the right decision? d. All of the above
Appendix: Suppose that a private firm wants to go public to give the owners a chance to retire. It follows the lead of the Google IPO by using a modified Vickrey (or uniform price) auction. The owners of the firm plans to sell 1 million shares and hope to raise at least $10 million from the auction. The following bids were submitted. Bob 250,000 shares at $12 Sam 350,000 shares at $13 Mary
300,000 shares at $9 Sue 100,000 shares at $10 Ravi 450,000 shares at $11 a. The market clearing price is $13, and the sellers of the firm get $13 million. b. The market clearing price is $12, and the sellers of the firm get $13 million. c. The market clearing price is $11, and the sellers of the firm get $11 million. d. The market clearing price is $10, and the sellers of the firm get $10 million. e. The market clearing price is $9, and the sellers of the firm get$9 million
If a firm is wondering whether or not it should "buy or make,"
A) it is exploring its horizontal boundaries. B) it is exploring its vertical boundaries. C) it is exploring the boundaries of its network. D) it is considering a "winner-take-all" event.