A chief purpose of long-term contracts is to improve agents'
A) information.
B) incentives.
C) control over principals.
D) security.
B
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At the current quantity of table saws, the marginal social cost is more than the marginal social benefit. Then
A) production of table saws should be decreased to reach the efficient level. B) production of table saws should be increased to reach the efficient level. C) production of table saws is currently at the efficient level. D) producer surplus will be larger than consumer surplus.
An income tax to pay for national defense can approximate a _____ if there is a close relationship between income and _____
a. user charge; wealth b. unit tax; wealth c. user charge; consumption d. sales tax; consumption
If the world price of steel is greater than the U.S. "no-trade" domestic equilibrium price of steel, the United States:
a. will not produce steel. b. will demand steel from the rest of the world. c. will supply steel to the rest of the world. d. will not trade in steel. e. will have a shortage of steel in the domestic market.
An increase in investment combined with a decrease in education would have an indeterminate effect on both short run and long run aggregate supply
a. True b. False Indicate whether the statement is true or false