A decrease in supply will cause a(n)

If the price of milk increased by 5 percent because of an increase in the demand for milk, and the quantity of milk supplied increased by 7 percent

A) the supply curve of milk has shifted rightward. B) the price elasticity of supply of milk is greater than one. C) milk is more of a luxury than a necessity. D) milk is more of a necessity than a luxury.

In a principal-agent problem, if the contract used leads to the maximum of the principal's and agent's combined value (profits, payoffs), we can say that this contract features

A) inefficiency in production, since only the principal's profits should be maximized. B) inefficiency in production, since only the agent's payoffs should be maximized. C) efficiency in production. D) inefficiency in production, since the agent's payoffs should be maximized and the principal's profits should be minimized.