Refer to Scenario 17.5. Under which of the following payment schemes would workers have an incentive to exert high effort? A) A guaranteed wage equal to $0 B) A guaranteed wage equal to $5000 C) A guaranteed wage equal to $10,000 D) A wage equal to the income earned, minus $4000 E) A wage equal […]
The phenomenon of nonparticipation appears to be a permanent state. Indicate whether the statement is true or false ANSWER F
The beta for General Motors (GM) is 0.5, the risk-free rate is 4%, and the market return is 9%. What is GM’s risk-adjusted discount rate? A) 4% B) 4.5% C) 6.5% D) 9% ANSWER C
Refer to Figure 8.2. How much profit will the firm earn if price stays at $80? A) $0 B) $306 C) $312 D) $1000 E) $1024 ANSWER E
There are no gainers from discrimination. Indicate whether the statement is true or false ANSWER F
Labor force participation is a guaranteed ticket out of poverty. Indicate whether the statement is true or false ANSWER F
DVDs can be produced at a constant marginal cost, and Roaring Lion Studios is releasing the DVDs for its last two major films. The DVD for Rambeau 17 is priced at $20 per disk, and the DVD for Schreck 10 is priced at $30 per disk. If the Lerner indices for Rambeau 17 divided by […]
In the economic literature on principal-agent problems, the ________ is the person who takes some action, and the ________ is the person whom the action affects. A) agent, principal B) principal, agent C) Both statements describe the agent. D) Both statements describe the principal. ANSWER A
If, in the game in Scenario 13.14, R moves first, it will select A) Q = 50. B) Q = 100. C) Q = 150. D) a mixed strategy over the three choices that includes some positive likelihood for each Q. E) a mixed strategy over the choices Q = 50 and Q = 100. […]
Discrimination has no impact on the total output of goods and services. Indicate whether the statement is true or false ANSWER F