An example of the principal-agent problem is when
A) managers try to cope with employees that are inefficient.
B) proprietors don't receive any money payment for their entrepreneurial skills.
C) managers devise penalties that eliminate employee waste.
D) managers devise incentives that encourage employees to act in the owner's behalf.
D
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To understand why wages are so low and the process by which wages are determined, we must focus on the supply side of the labor market
Indicate whether the statement is true or false
Economic cost
A. Includes both implicit and explicit costs. B. Includes only implicit costs. C. Decreases as the level of production increases. D. Is the sum of actual monetary payments made for resources used to produce a good.
One model in economics is the permanent income hypothesis, which basically states that a household's expenditures will not react to a change in income unless that change in income is viewed as being permanent
How would you use this model to predict the expenditure patterns over the course of a year of a real estate agent who only sells homes during the months of April through July?
Suppose the production of DVD players can be represented by the following production function: q = L0.4K0.4. Which of the following statements is (are) TRUE?
A) The production function has decreasing returns to scale. B) The marginal productivity of labor falls as labor increases in the short run. C) Capital and labor can be substituted for one another. D) All of the above.