Owners may have little to do with the management of the firm in the case of
A. corporations.
B. either corporations or proprietorships.
C. partnerships.
D. proprietorships.
Answer: A
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The above figures show the market for gasoline. Which figure shows the effect of the end of a nine month strike by workers at all U.S. oil refineries?
A) Figure A B) Figure B C) Figure C D) Figure D
A conflict between an owner and a manager may occur when
A) the manager earns more when the firm has higher profits. B) the manager is seeking to maximize leisure time. C) the owner can easily observe the manager slacking off and punish him accordingly. D) the firm is very small and the manager must perform multiple tasks.
An increase in the price of an input to a perfectly competitive industry will: a. increase price and reduce the number of firms
b. increase price and increase the number of firms. c. increase price and have an ambiguous effect on the number of firms. d. reduce the number of firms and have an ambiguous effect on price.
The payment made to an owner of a resource in excess of the opportunity cost of the resource is
a. economic rent b. economic profit c. wages d. interest e. opportunity cost