To reduce Agency problems, executive compensation should be designed to
a. be paid baased on quarterly sales
b. create incentives so that managers act like owners of the firm
c. avoid making the executives own shares in the company
d. be an increasing function of the firm's expenses
e. all of the above
b
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According to the “law” of demand, we would expect
A. the demand curve to be negatively sloped. B. the demand curve to be positively sloped. C. the total quantity demanded by the market to move in the same direction as price. D. marginal utility to increase as quantity demanded increases.
Adverse selection exists because ________
A) moral hazard exists B) asymmetric information exists C) of government regulation D) financial innovation continually occurs
With respect to the market clearing price and the equilibrium quantity of good A, increases in the demand for and the supply of good A will definitely
A. increase the equilibrium quantity of good A but have an uncertain impact on the market clearing price of A. B. increase the market clearing price and the equilibrium quantity of good A. C. reduce the market clearing price and the equilibrium quantity of good A. D. increase the market clearing price of good A but have an uncertain impact on the equilibrium quantity of A.
According to the law of demand
A) people buy more of a good when the price rises. B) people buy more of a good when their income rises. C) people buy more of a good when the relative price rises. D) people buy more of a good when the price falls.