The principal-agent problem as it applies to labor employment refers to:
A. Employer and workers wanting the firm to survive and thrive
B. Firms having the profit motive, while workers may be shirking on the job
C. Employers having a problem finding qualified workers
D. Workers facing a problem finding employment
B. Firms having the profit motive, while workers may be shirking on the job
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A firm lowers the price it charges. The firm's total revenue decreases. What can we conclude about the price elasticity of demand?
A) Demand is elastic. B) Demand is unit elastic. C) Demand is inelastic. D) Demand is perfectly elastic. E) Not enough information is given to conclude anything about price elasticity of demand.
When deciding whether to buy a second car, the economic way of thinking indicates that the purchaser should compare
a. the benefits expected from two cars with the cost of both. b. the additional benefits expected from a second car with the cost of the two cars. c. the dollar cost of the two cars with the potential income that the cars will generate. d. the additional benefits of the second car with the additional cost of the second car.