In a principal-agent relationship, moral hazard might occur if
A) the agent can hide his actions from the principal.
B) the principal and agent are married.
C) payoffs are based on a state of nature.
D) the principal can hide her actions from the agent.
A
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Rufus runs a skunk-skinning service in West Virginia. He employs skinners at a wage rate of $240 a week for each one. He leases the shack where his workers work for $200 per week. The rent is fixed for the next two years
Last week his 10 employees managed to skin a total of 300 skunks. a. What is the average product of labor for Rufus's company? b. What is Rufus's total variable cost per week? c. What is the average variable cost for Rufus's company? d. If Rufus adds his brother Jethro to his staff, at a wage rate of $240 a week, and his company can now skin 310 skunks per week, what is Rufus's new average variable cost?
When the Treasury bond market becomes less liquid, other things equal, the demand curve for corporate bonds shifts to the ________ and the demand curve for Treasury bonds shifts to the ________
A) right; right B) right; left C) left; right D) left; left