The types of problems in principal-agent relationships typically include
a. adverse selection - whom to hire
b. moral hazard - how to motivate workers
c. uncertainty - how many workers will be needed
d. Both A&B
d
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Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B
If the natural monopoly shown in the figure above is unregulated, then the deadweight loss will be
A) $0. B) $2 million. C) $4 million. D) $8 million.
Price elasticity of supply is always
A) positive because of the law of supply. B) negative because of the law of supply. C) positive because of diminishing marginal utility. D) negative because percentages can only be negative.
Which of the following is not a benefit of the Mform of an organization?
A. Improved use of senior management's time B. Focus across the entire product line C. Use of local product or geographic information D. Improved coordination among functional specialists