A conflict between an owner and a manager may occur when
A) the manager earns more when the firm has higher profits.
B) the manager is seeking to maximize leisure time.
C) the owner can easily observe the manager slacking off and punish him accordingly.
D) the firm is very small and the manager must perform multiple tasks.
B
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The social interest theory of regulation suggests that the political process and regulations will ________ and the capture theory of regulation suggests that the political process and regulations will ________
A) seek to minimize deadweight loss; serve the interests of the producers B) try to maximize the producers' economic profits; seek to minimize deadweight loss C) be unaffected by deadweight loss; increase the firms economic profits D) ignore producers' interests and concentrate on consumers' interests; seek to minimize firms' economic profits
One reason for computing the logarithms (ln), or changes in logarithms, of economic time series is that
A) numbers often get very large. B) economic variables are hardly ever negative. C) they often exhibit growth that is approximately exponential. D) natural logarithms are easier to work with than base 10 logarithms.