If you knew that two countries had the same level of real GDP per person, what additional piece of information would help you determine in which country people had a better standard of living?
A. The total physical volume of output for each country
B. The average level of prices in each country
C. The average number of hours worked per week in each country
D. The population of each country
Answer: C
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Economists refer to the general problem of ________ as a principal-agent relationshi
A) moral hazard B) adverse selection C) negative externalities D) pecuniary externalities
The manager of Steel Works learns of a new technological interdependency between the first stage and the intermediate stage of production. If Steel Works currently contracts with another firm for the intermediate stage of production, which of the following is true?
A) The manager has less of an incentive to integrate forward. B) The manager has less of an incentive to integrate backward. C) The manager has more of an incentive to integrate backward. D) The manager has more of an incentive to integrate forward.
The producer's surplus is equal to the difference between how much the seller can charge for a product and how much the consumer is willing to purchase it for
a. True b. False Indicate whether the statement is true or false
Consider Figure 8.9. If David's payoff in the bottom rectangle were 40 instead of 70, the outcome of the game would be that:
A. both choose a high price. B. both choose a low price. C. Becky chooses a high price and David chooses a low price. D. David chooses a high price and Becky chooses a low price.