People choose to do something:
A. when they believe the benefits outweigh the costs of the decision.
B. when they believe the costs outweigh the benefits of the decision.
C. when they believe their decision cannot be questioned by anyone else.
D. when they believe it won't harm anyone and will better themselves.
A. when they believe the benefits outweigh the costs of the decision.
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One way for a company like McDonalds to overcome principal-agent problems is to advertise for franchisees
a. True b. False
Which of the following would be considered an implicit cost?
a. Health insurance of employees paid for by the firm b. The water bill of the firm c. The salaries paid to the managers of the firm d. Foregone rent on assets owned by the firm
Which of the following statements is TRUE about the relationship between a firm's demand curve under perfect competition and monopoly?
A) Under perfect competition, the demand curve is perfectly elastic; under monopoly, the demand curve has elastic, unit-elastic and inelastic portions. B) Under monopoly, the demand curve is perfectly elastic; under perfect competition, the demand curve has elastic, unit-elastic and inelastic portions. C) The demand curves for a monopoly and perfect competition are always inelastic. D) We can define a demand curve under perfect competition but not under monopoly.
If a profit-maximizing firm is currently producing where MR = MC, it should
A. decrease output so that marginal revenue will be greater than marginal cost and the firm's profit will increase. B. exit the industry. C. not change because it is already maximizing profit. D. increase output so that marginal revenue is less than marginal cost.