The problem with the separation of ownership from control is that
A. the managers of the firm can make decisions that reduce the wealth of the owners while not reducing their own wealth.
B. the managing partner of a firm may not always behave in the way that other managers would if they were the managing partners.
C. the owners of firms may not always know the best way to run a firm, yet they are the ones who elect the managers of the firm.
D. the owner in a proprietorship may not always act in the profit-maximizing fashion because he or she may not have the experience or expertise that professional managers have.
Answer: A
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In Country X, the highest 10 percent of families account for 70 percent of the income. In Country Y, the highest 10 percent of families account for 20 percent of the income. In this example:
a. Country Y would be located on the line of perfect inequality. b. income is more equally distributed in Country Y. c. income is more equally distributed in Country X. d. Country X would be located on the line of perfect equality. e. the degree of income inequality is equal in both the countries.
People are likely to want to hold more money if the interest rate
a. increases making the opportunity cost of holding money rise. b. increases making the opportunity cost of holding money fall. c. decreases making the opportunity cost of holding money rise. d. decreases making the opportunity cost of holding money fall.
A firm with a demand curve P = 10 - Q is a perfect price discriminating monopolist with zero marginal costs and fixed costs of 12. Consider the following two statements comparing the price discriminating case with a single price monopolist. 1) In this case consumers are better off as a group because more of the product is produced. 2) Producers are better off because they have higher profits. Which of the following comments about these statements is true? 
A. Only the second statement is true. B. Both statements are true. C. Both statements are false. D. Only the first statement is true.
Which of the following does not hinder growth in developing countries?
A. Education B. Disease C. Instable governance D. Geography