In a public corporation, asymmetric information often results in a principal-agent problem between top management and ownership. What information would help to prevent this principal-agent problem?
What will be an ideal response?
Top managers know more about how the company is run than do the firm's shareholders. The principal-agent problem might be overcome if shareholders had all the information about the company and about the consequences of the actions taken by the firm's managers that the managers themselves possess.
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Foreign investment can give a low-income country
A) no hope to break the vicious cycle of poverty. B) a path to dependency and low growth. C) access to funds for investment and access to technology. D) the means to slow down growth.
Refer to Figure 4-6. What is the value of consumer surplus after the imposition of the price floor?
A) $1,500 B) $2,700 C) $4,500 D) $5,700
In a graph with output on the horizontal axis and total revenue on the vertical axis, what is the shape of the total revenue curve for a perfectly competitive seller?
A) a ray from the origin B) inverted U-shaped C) U-shaped D) a horizontal line
The concept of minimizing the number of physical units of the inputs needed for a given amount of output is known as
a. technical efficiency. b. the principle of diminishing marginal returns. c. economic efficiency. d. decreasing returns to scale.