How is the architecture within firms usually designed?
What will be an ideal response?
Organization design is created by executives through explicit and implicit contracts. The senior management sets up policies regarding decision rights of the agents in the firm. Managers must also develop control systems that enable proper performance evaluation. CEOs are also decision makers and they can design alternative ways to obtain information, delegation being the most common method. Thus, a firm can be described as consisting of layers of management, where each layer is responsible for optimal information acquisition and distribution.
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? In Figure 5-13, the slope of the budget line (dropping all minus signs) equals
A. price of good X/price of good Y. B. price of good Y/price of good X. C. the minimum number of units of good Y the consumer would have to receive to make him willing to give up one unit of good X. D. the minimum number of units of good X the consumer would have to receive to make him willing to give up one unit of good Y.
As more firms enter a perfectly competitive industry, the industry supply curve shifts
a. to the left and price falls b. to the right and price rises c. to the right and price falls d. to the left and price rises e. in an unpredictable way
One cause of the 2008 financial crisis was that many mortgage brokers were ______.
a. warning borrowers not to borrow too much b. discouraging borrowers from using new hybrid loans c. encouraging borrowers to borrow more than they could afford d. promoting fixed-rate mortgages instead of adjustable-rate mortgages
The greater the flow of investment spending, the greater the increase in the stock of:
A. saving. B. income. C. capital. D. money.