The best contract a principal can make with an agent gives the agent all profit after paying the principal a fixed fee
Indicate whether the statement is true or false
F This contract is good for motivating the agent but it also forces the agent to bear risk, something the agent may not wish to do.
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If national saving increases, ________. (Assume that the capital account is zero and net transfers are zero.)
A) the sum of domestic investment and net exports must decrease B) the sum of domestic investment and foreign investment must decrease C) the sum of domestic investment and foreign investment must increase D) foreign investment must decrease to cover the gain
Of the arguments for limiting trade, which one is the most appealing to economists?
A. protecting the jobs of citizens B. protecting the profits of companies C. preventing other countries from getting a comparative advantage by their use of child labor D. helping an industry that is in trouble
If a firm buys some labor in a competitive market and some labor as a monopsonist, the firm is most likely to
A) pay the same wage to both types of labor. B) pay a lower wage to the labor purchased in the competitive market. C) pay a higher wage to the labor purchased in the competitive market. D) not exercise any of its monopsony power.
Refer to the figure below. Suppose the solid line represents the current supply of Star Wars action figures. If retailers learn that a new Star Wars movie will be released in several months, this news is likely to cause: 
A. neither a change in supply nor a change in quantity supplied since only future demand will change. B. a decrease in the quantity supplied, but no change in current supply. C. current supply to shift to S(B) in anticipation of higher future prices. D. current supply to shift to S(A) in anticipation of higher future prices.