Suppose a plaintiff hires a lawyer to represent her in a court case. She agrees to pay the lawyer a wage per hour. She knows precisely what the lawyer should do and how long each activity should take, and she can verify that the lawyer has correctly completed each activity. She can terminate the contract at any time. With this contract,
A) the lawyer bears all the risk.
B) the risk is shared by the lawyer and the plaintiff.
C) production efficiency can be achieved.
D) production efficiency is impossible.
C
You might also like to view...
At the point where actual inflation is equal to expected inflation,
A) the short-run Phillips curve intersects the long-run Phillips curve. B) the short-run Phillips curve is the same as the long-run Phillips curve. C) the unemployment rate is zero. D) there is no short-run Phillips curve, as this situation only occurs in the long run.
Assume that in a price-fixing game, if Player A breaks the agreement in the first year, she earns $11 while Player B earns $5 . However, if Player A breaks the agreement once, Player B decides to break the agreement for eternity, leaving each to receive $8 per year for the rest of their lives. If they both keep the agreement each receives $9 per year for the rest of their life. If the discount
rate is 120 percent per period: a. Player A will prefer to break the agreement in the first year. b. Player A will prefer to break the agreement in the second year. c. Player A will prefer to keep the agreement throughout her life. d. Player A will prefer to keep the agreement only for the first five years.
Which of the following will cause an increase in consumer surplus?
a. an increase in the production cost of the good b. a technological improvement in the production of the good c. a decrease in the number of sellers of the good d. the imposition of a binding price floor in the market
Which of the following is not a variable in the index of leading indicators?
A. average work week B. duration of unemployment C. unemployment claims D. new building permits