Which of the following helps resolve the problem of corporate managers failing to work in the interests of stockholders when corporate ownership is separated from control?
a. A dominant stockholder can fire managers that fail to maximize corporate profit.
b. If managers are paid a flat salary they will have a strong incentive to maximize corporate profit.
c. Dissatisfied stockholders can "fire" the manager and the firm simply by selling their shares in the corporation, lowering the share price and making the firm an attractive takeover target for a reform-minded entrepreneur.
d. A dominant stockholder can use discretion in distributing corporate profits among shareholders.
c
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The components of aggregate expenditure that are not influenced by GDP are known as
A) fixed expenditure. B) induced expenditure. C) planned expenditure. D) unplanned expenditure. E) autonomous expenditure.
An import quota is an example of
A) a price ceiling. B) a price floor. C) a queuing device. D) a quantity restriction.
The following is not associated with bid-rigging
a. bid-riggers bidding their true value b. "knockout" auctions c. bid rotations d. amnesty to the first conspirator willing to testify against fellow conspirators
If average total cost is rising
A) marginal cost is above average total cost. B) marginal cost is rising. C) marginal product is rising. D) marginal cost is above average total cost and is falling.