The invisible hand principle indicates that competitive markets can help promote the efficient use of resources
What will be an ideal response?
even when each market participant cares only about their own self interest rather than about the overall efficiency of resource use.
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Principal-agent problems are less likely to arise
a. if it is easy for principals to know agents' actions and if there is less conflict between their goals b. if it is difficult for principals to know agents' actions and if there is less conflict between their goals c. if it is easy for principals to know agents' actions and if there is some difference in their goals d. if it is difficult for principals to know agents' actions and if there is some difference in their goals e. if agents have higher incomes
Which of the following accurately describes a major difference between a monopolist and firms in perfectly competitive markets?
a. The monopolist maximizes profit; firms in perfectly competitive markets maximize sales b. The monopolist may earn long-run economic profit; firms in perfectly competitive markets cannot. c. The monopolist is a price taker; firms in other markets are price searchers. d. The monopolist may earn short-run profit; firms in perfectly competitive markets cannot.
If there is a stable downward-sloping Phillips curve, it follows that an economy can choose the combination of
A) high unemployment and low inflation. B) low unemployment and high inflation. C) moderate unemployment and moderate inflation. D) low inflation and low unemployment. E) a, b, and c
Assuming QF is the full employment equilibrium then in Figure 11.2, if the level of spending is equal to AD1, the AD shortfall would be
A. Equal to YZ. B. Greater than XZ. C. Equal to XY. D. Equal to XZ.