J.T. Smith runs Game maker, an equipment producer for gaming service corporations. As CEO, Smith is seemingly worth $2.5 million per year in the marketplace. The directors are attempting to decide how to divide his compensation package between cash salary and perquisites. Using budget constraints and indifference curves, illustrate the potential outcomes for the board of directors.
What will be an ideal response?
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When a competitive market achieves allocative efficiency, it is implied that
A. the quantity demanded is lower than the quantity supplied. B. the marginal benefit of having the product is greater than the marginal cost. C. the combined consumer and producer surplus is maximized. D. the buyers are getting the maximum consumer surplus from the product.
Why might a country's savings rate have a high positive correlation to its investment rate?
A) A country's gains from intertemporal trade may have been large. B) governments' regulation to avoid inflation C) A country's savings rate and investment rate are generally not positively correlated but rather have negative correlation. D) governments' regulation to avoid large current account balances E) A government has not practiced sufficient fiscal regulation.
How does the Tax Foundation predict tariffs will affect unemployment, income and economic growth?
What will be an ideal response?
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.