The role of government in a market economy includes all of the following except
a. providing services such as national defense.
b. collecting taxes.
c. extensive ownership of productive resources.
d. making and enforcing laws.
c
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________ makes designing efficient contracts costly.
A. Self-selection B. Huge monitoring costs for the agent C. Signaling D. Huge monitoring costs for the principal
Suppose that you open your own business and earn an accounting profit of $35,000 per year. When you started your business, you left a job that paid you a $30,000 salary annually. Also, suppose that you invested $70,000 of your own funds to start up your business. If the normal rate of return on capital is 10 percent, your economic profit is
A. -$2,000. B. -$5,000. C. $5,000. D. $2,000.
Use the above table. If the marginal revenue product is $30, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?
A. 1; $10 B. 2; $15 C. 4; $25 D. 3; $20
Buffalo Wild Wings CEO Sally Smith decided to spend more than $200 million on restaurant renovations in an attempt to attract more lunch customers and more families
Like CEOs of other monopolistically competitive firms, Smith knew that without innovating A) her firm would become perfectly competitive. B) her firm had no chance of remaining in business. C) her firm would eventually earn an accounting profit of zero. D) her firm's profits would eventually be competed away by other firms.