Asymmetric information problems arise A) in horizontally integrated firms, but not vertically integrated firms. B) in vertically integrated firms, but not horizontally integrated firms. C) in both vertically and horizontally integrated firms. D) only in firms that do not have the advantage of either horizontal or vertical integration. E) only when a single firm is […]
When a drug company develops a new drug it is granted a ________ making it illegal for other firms to enter the market until the ________ expires. A) franchise; franchise B) copyright; copyright C) government license; government license D) patent; patent ANSWER D
In 2005, fewer than one million workers were involuntarily employed on a part-time basis. Indicate whether the statement is true or false ANSWER F
In Plessy v. Ferguson, the Supreme Court condoned separate but equal education. Indicate whether the statement is true or false ANSWER T
Why do workers tend to choose low effort levels when they are compensated with fixed wage payments? A) Workers ignore the cost of effort B) The net compensation after deducting the cost of effort is always higher when the worker provides low effort. C) Workers care more about the stability of income than the level […]
Relative to a simultaneous-move situation, the loss to firm C from having to move second in the game in Scenario 13.14, would be A) 37. B) 20. C) 12. D) 8. E) 5. ANSWER C
The decision firms make about new capital projects is most like the decision consumers make when they decide A) whether to take a new job. B) which of two new jobs to take. C) what brand of coffee to buy. D) whether to buy a new house. E) whether to go on vacation. ANSWER […]
Blacks and whites go into the education system more equal than they come out. Indicate whether the statement is true or false ANSWER T
Refer to Figure 8.2. As the competitive industry, not just the firm in question, moves toward long-run equilibrium, how much profit will the firm earn? A) $0 B) $306 C) $312 D) $1000. E) $1024 ANSWER A
What do we mean when we state that a particular principal-agent payment scheme is inefficient? A) The principal and agent could find another agreement that would increase the sum of the owner’s revenue and the worker’s payment. B) The agreement involves the highest level of effort for the worker. C) The agreement leads to the […]
