As it relates to owners and managers, the principal-agent problem results from the:
A. separation of corporate ownership and control.
B. double taxation of corporate profit.
C. limited liability of corporate owners.
D. differing interests of corporate stockholders and bondholders.
Answer: A
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Sarah went to a store that sells used goods to buy a camera. She was looking at different models when the store manager asked her about the maximum price that she would pay
Because it was impossible to know the quality of the cameras, Sarah lowered her willingness to pay to $200, although she values a used camera of good quality at $300. If the seller values a camera of good quality at $250, what is most likely to happen in this case?
In the coordination failure model, the "good" equilibrium is characterized by a
A) higher real interest rate and a higher price level than the "bad" equilibrium. B) higher real interest rate and a lower price level than the "bad" equilibrium. C) lower real interest rate and a higher price level than the "bad" equilibrium. D) lower real interest rate and a lower price level than the "bad" equilibrium.
An example of moral hazard is
a. workers shirking when the boss is not looking b. health care insured dieting and exercising c. drivers of safer cars turning their phones off before driving d. borrowers investing their loan proceeds exactly as the bank requires
Refer to the following graph.
If price is currently at B and rises, total revenue will rise.
Answer the following statement true (T) or false (F)