The incentive for managers of a government-operated firm (for example, a state university or the U.S. Post Office) to operate efficiently will be
a. low because all government workers are lazy.
b. low because there are no residual claimants to monitor and institute cost-reducing measures.
c. high because government employees and officials will be less concerned with personal gain.
d. high because voters can easily detect those who are to blame for inefficiencies and replace them.
B
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Opportunity costs differ among nations primarily because
a. nations employ different currencies. b. nations have different endowments of land, labor skills, capital, and technology. c. nations have different political institutions. d. work-leisure preferences vary considerably from one nation to another.
According to Okun's law, when cyclical unemployment increases by one percentage point, the recessionary gap ________ by ________ percent of potential output.
A. closes; two B. closes; one C. widens; one D. widens; two