If all issues of effort, output, and pay are fully observable and contactable between an owner and an employee, then:
A. revenues of the firm are independent of employee effort.
B. the utility of the employee is unimportant to the outcome.
C. incentive conflicts remain intractable.
D. incentive conflicts can be eliminated.
Answer: D
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Which of the following will most likely occur under a system of clearly defined and enforced private property rights?
What will be an ideal response?
Table 7.2 shows labor and the quantity of shoes produced by a firm. Given the information in the table below, _____ is the average product of the third unit of labor. ? Labor Total product (pairs of shoes) 0 0 1 20 2 50 3 75 4 80 5 75
a. ?15 pairs of shoes b. ?10 pairs of shoes c. ?25 pairs of shoes d. ?45 pairs of shoes e. ?75 pairs of shoes
In the case of a perfectly competitive firm, the optimal markup over marginal cost is 0 percent
Indicate whether the statement is true or false
If the U.S. price level decreased relative to price levels in foreign countries, what would be the impact on domestic aggregate supply and aggregate demand curves?
a. the aggregate supply curve would shift outward and the aggregate demand curve would remain unchanged b. the aggregate supply curve would shift inward and the aggregate demand curve would remain unchanged c. the aggregate demand curve would shift outward and the aggregate supply curve would remain unchanged d. the aggregate demand curve would shift inward and the aggregate supply curve would remain unchanged e. the domestic aggregate demand and supply curves would remain unchanged