In an ideal organization, when do agents always make decisions in the best interests of their principle?
a. The decision makers have the information necessary to make the decision
b. The decision makers have the incentive to make the right decision
c. All of the above
d. None of the above
c
Economics
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Suppose firms A and B each make T-shirts. Firm A's production function is q = L0.5K0.5. Firm B's production function is q = 1.2 ? L0.5K0.5
If the two firms each hire the same amounts of capital and labor, compare the two firms in terms of APL and MPL.
Economics
The major incentive for cost minimization is the
a. power of shareholders in the company. b. fear of top management by workers. c. discipline imposed by the market system. d. impact on U.S. corporations of taxing by the government.
Economics