Dan Heath is the majority owner of Plain Truth Advertising. He hires Shirley Downs as the chief executive officer (CEO). In terms of an economic model, Mr. Heath is the ________ and Ms. Downs is the ________.
A. agent; principal.
B. agent; intermediary.
C. principal; agent.
D. principal; intermediary.
Answer: C
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Refer to Figure 11.1. Assume the economy is in equilibrium at 1 = 0. Other things equal, an unexpected large increase in the price of oil will result in a movement from point ________ to point ________
A) A; B B) B; A C) A; C D) A; D
Where Es is the elasticity of supply and Ed is the own price elasticity of demand, the fraction of the tax passed on to consumers in the form of higher prices is
A) Es/(Es-Ed). B) Ed/(Es-Ed). C) Es/(Ed-Es). D) Ed/(Ed-Es). E) Ed/Es.
When economic profits are positive, accounting profits could be:
A. positive. B. negative. C. zero. D. All of these are possible.
To be effective, a price ceiling must be below the market equilibrium price
Indicate whether the statement is true or false