A widget producer is deciding whether to compensate widget makers on a salary basis or a per unit basis. Given that it is difficult to monitor shirking, which of these pay schedules would provide stronger performance incentives?
a. Per piece compensation
b. Salary
c. Both of them
d. Neither of them
a
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Producer groups tend to lobby for
A) price floors. B) price ceilings. C) quantity quotas. D) taxes.
Parvez is trying to decide whether or not he should lend $1,000 to Eli for a year. Eli would pay a fixed nominal interest rate of 8 percent. Parvez expects the inflation rate to be 4 percent for the year. If he does not lend the $1,000 to Eli, Parvez will purchase an indexed savings bond that pays an interest rate of 4 percent, or he will put the money in a (nonindexed) savings account earning 6
percent. Parvez a. will earn 4 percent in real terms if he loans Eli the money, 0 percent in real terms if he buys the bond, and 6 percent in real terms if he puts the money into a savings account b. is better off holding his money as cash c. is indifferent between lending the money to Eli and buying the bond because the real interest rate is the same in either case d. should purchase the bond because it earns the highest real rate of interest e. earns the highest real rate of interest if he puts his $1,000 into a savings account
Anything can be money if it acts as a:
a. medium of exchange. b. All of the answers must be correct. c. store of value. d. unit of account.
All of the following can be barriers to entry except:
A. price discrimination. B. economies of scale. C. a firm's superior production ability. D. patents.