In corporations, a principal-agent problem can arise when
a. the shareholders are the principal and the managers are the agent.
b. the board of directors is the principal and the managers are the agent.
c. the shareholders are the principal and the board of directors is the agent.
d. All of the above are correct.
d
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Frank owns Frank's Shoes. During a particular period, the price of shoes rises and Frank produces more shoes by hiring more workers and using more material, such as leather. However, he still works with the same size factory because he has a long-term lease. You know that
a. by producing more, Frank's supply curve of shoes shifts to the right b. the factory is overworked so that Frank cannot maintain the production levelhe selected c. by producing more, Frank's demand curve for shoes shifts to the left d. Frank is producing in the short run e. Frank is producing in the long run
A minimum wage that is less than the prevailing market wage will:
A. have no effect on the market. B. increase unemployment. C. increases wages. D. reduce wages.