What do we mean when we state that a particular principal-agent payment scheme is inefficient?
A) The principal and agent could find another agreement that would increase the sum of the owner's revenue and the worker's payment.
B) The agreement involves the highest level of effort for the worker.
C) The agreement leads to the lowest level of revenue for the owner.
D) The sum of the income taxes paid by the owner and the worker is too high.
A
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Refer to the above table. The table gives the combinations of real disposable income and real consumption for a college student for a year. The break-even level of real disposable income is
A) 0. B) 6,000. C) 14,000. D) 10,000.
"Less demand causes lower prices, and lower prices cause more demand." The above statement shows
A) economic theory can be used to prove just about anything. B) everything depends on everything else. C) prices fluctuate in a free-market situation. D) the speaker has confused himself by saying demand in the first half of the statement when he meant quantity demanded. E) the speaker has confused himself by saying demand in the second half of the statement when he meant quantity demanded.