Return to the situation with the executive from the previous question. Now assume that shareholders cannot observe effort, so cannot specify how hard the executive works in the contract but must induce it through the incentive scheme. Which of the following wage contracts would work out best for shareholders in equilibrium?

Refer to Table 8.1. That the firm is perfectly competitive is evident from its

A) increasing marginal cost. B) increasing total cost. C) zero economic profits. D) constant marginal revenue. E) absence of marginal values at Q = 0.

An unintended consequence of rent control has been

a. apartment owners failing to properly maintain their buildings b. a surplus of housing causing rents to fall below maintenance cost c. that rents have been consistently held above the equilibrium price d. a shortage of tenants e. a decrease in the homeless population