A potential problem arises in principal-agent relationships
A) because the agents' actions are not always observed by the principals B) because the principals' actions are not always observed by the agents C) because the agent's and the principals' actions are always observed by each other D) the observability of actions is irrelevant
Refer to Scenario 7-2. Suppose a reduction in input prices shifts the market supply curve to QS=PQ ^ { S } = PQS=P By how much does total producer surplus increase as a result of this supply shift?
Total producer surplus prior to the shift is $162, and total producer surplus after the shift is $200. Therefore, total producer surplus increases by $38 as a result of the supply shift.
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You are buying a previously owned car today at a price of $4,950. You are paying $750 down in cash and financing the balance for 42 months at 8.45%. What is the amount of each loan payment?
A) $108.54 B) $115.05 C) $115.86 D) $135.60 E) $136.55
The marginal social benefit received from pollution is equal to its marginal social cost in the market for highly polished glass.In this situation:
A) society's well-being can be improved if the quantity of pollution decreases. B) firms in the market produce too much pollution. C) firms in the market produce too little pollution. D) firms in the market produce the socially optimal level of pollution.