The situation where politicians make decisions that will raise their chances of reelection, even if those decisions are detrimental to the general public, is referred to as the:
A. Moral hazard problem
B. Principal-agent problem
C. Adverse selection problem
D. Common good problem
B. Principal-agent problem
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Assume a firm is currently employing 20 units of capital and 100 units of labor in its production process
Assume also that the marginal product of the 20th unit of capital is 40 units of output, the marginal product of the 100th unit of labor is 10 units of output and the per unit prices of capital and labor are $20 and $10, respectively. In this case, in order to minimize its costs of production the firm should: A) hire more capital and less labor. B) hire more labor and less capital. C) hire less capital and less labor. D) hire more capital and more labor.
The resource based perspective indicates that firms exhibit different performances within the same industry because
a. Some firms have better resources than others b. Some firms have organizational structures that can be duplicated c. Some firms sell goods that have a more elastic demand d. Some firms sell goods that have a perfectly elastic demand
If exports are being excluded unfairly from a market, the World Trade Organization (WTO) may authorize
A. Other nontariff barriers. B. Quotas. C. Retaliatory tariffs. D. Retaliatory comparative advantages.
As a monopolist's profit-maximizing quantity moves further away from the competitive industry's profit-maximizing quantity,
A. the larger the deadweight loss in the market. B. the larger the profits of the monopoly. C. the smaller the deadweight loss in the market. D. the harder it is for the firm to stay as a monopoly.