Why is the principal-agent problem less likely when getting a haircut than when getting a car repaired?
a. Haircuts are less expensive than car repairs.
b. There are no hidden actions when getting your hair cut.
c. There are no hidden actions when getting your car repaired.
d. Auto mechanics are less honest than hair stylists.
e. There is no principal-agent relationship in car repair.
B
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A competitive, unregulated market would
A) produce too much pollution because pollution is an external cost. B) produce too little education because education has an external benefit. C) fail to achieve equilibrium if there are externalities present. D) Both answers A and B are correct. E) Both answers B and C are correct.
In a monopoly
a. the industry has high barriers to entry b. the industry has high barriers to exit c. the industry has high barriers to entry and exit d. the industry has no barriers to entry or exit
If the reserve ratio is 5 percent, then the money multiplier is approximated to be:
A. 20. B. 5. C. 10. D. 2
In the self-correcting AD-AS model, the economy's short-run equilibrium position is indicated by the intersection of which two curves?
A. short-run aggregate supply and long-run aggregate supply B. short-run aggregate supply and aggregate demand C. long-run aggregate supply and aggregate demand D. long-run aggregate demand and short-run personal consumption expenditures curve