In order to have a principal agent problem, there must be
a. A market economy
b. A dictator and a subordinate
c. Asymmetric information
d. a situation in which the principal and agent have the same objective
e. Both c and d are correct
C
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According to Ricardian equivalence, the key consequence of an increase in the budget deficit that arises from a tax cut is ________
A) a decrease in private investment B) an increase in inflation C) an increase in the public's holding of government bonds D) an increase in the supply of money
If the quantity of public goods produced were decided by market forces (supply and demand),
a. there would be more goods provided than would be optimal b. there would be fewer goods provided than would be optimal c. the markets would provide the optimal number of goods d. prices would be optimal, but the optimal quantity of goods would not be produced e. the firms producing the public goods would earn excess profit
The more firms that are attracted to an industry, the greater will be the quantity of product supplied at any given price
a. True b. False Indicate whether the statement is true or false
A foot-Loofah is worth $15 to Edna. But she buys one on sale at Bath and Body works for just $8 what is the consumer surplus that results from Edna's purchase?
a. $8 b. $15 c. $7 d. $23 e. Cannot be determined from the information given.