The limit on the amount of information a manager can comprehend about a firm's operation is known as
a. adverse selection
b. bounded rationality
c. diseconomies of scope
d. managerial incompetence
e. moral hazard
B
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A change in demand would be illustrated by
a. a drop in price, which causes people to buy more. b. an increase in price, which causes people to buy less. c. a change in people’s preferences that causes them to buy either more or less than before. d. All of these.
The consumption function has a positive slope
a. True b. False Indicate whether the statement is true or false
Suppose that MPL = 200 and MPK = 240. If R = 30, then at which of the following wages would the firm want to hire fewer workers and more capital?
A. W = 23 B. W = 24 C. W = 25 D. W = 26
Firms are most likely to set an efficiency wage above the competitive wage if
A. the firm is not concerned with maximizing profits. B. workers refuse to work at the competitive wage. C. the firm does not know what the competitive wage is. D. most of its workers are not educated. E. firms find it expensive to monitor worker output.