The cost to a manager of doing a poor job running the firm is:
A. a decrease in his fixed salary.
B. a decrease in the sales of the firm.
C. an increase in the likelihood of being replaced.
D. a decrease in the profit of the firm.
Answer: C
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The demand for bonds curve slopes downwards because
A) at higher prices, bonds pay higher interest which makes them more attractive to buyers. B) lower prices reduce the cost of borrowing which makes them less attractive to buyers. C) at lower prices, bonds pay higher interest which makes them more attractive to buyers. D) higher prices raise the cost of borrowing which makes them less attractive to buyers.
The high cost of advertising during the Super Bowl will
A) not affect the efficient level of output because advertising is a sunk cost. B) will affect the efficient level of output because profits will fall significantly. C) not affect the efficient level of output because advertising is a fixed cost. D) Not enough information given.