The above figure shows the marginal social benefit and marginal social cost curves of doughnuts in the nation of Kaffenia. What is the efficient quantity of doughnuts to produce each day?

Consider a car dealership that advertises a three-year lease at $250 per month. When you arrive to apply, you discover that the lease requires a down payment of $3600 dollars. You will undertake the lease if

A) you value the lease at least $350 per month. B) you value the lease at least $250 per month, the $3600 is a sunk cost. C) you value the lease less than $350 per month. D) you value buying a new car at $400 per month.

To keep employees from shirking, you can invest in greater monitoring

a. even though monitoring is expensive b. especially when monitoring is not very efficient c. when employees fail to respond to incentive contracts d. when incentives solve both moral hazard and adverse selection problems with employees