In a public corporation, asymmetric information often results in a principal-agent problem between top management and ownership. What information would help to prevent this principal-agent problem?
What will be an ideal response?
Top managers know more about how the company is run than do the firm's shareholders. The principal-agent problem might be overcome if shareholders had all the information about the company and about the consequences of the actions taken by the firm's managers that the managers themselves possess.
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Using the above figure, suppose there is a decrease in the number of suppliers. Then
A) the equilibrium price will decrease below $25 per dozen roses. B) we cannot predict what will happen to equilibrium quantity. C) the equilibrium quantity will decrease below 10 dozen roses. D) both the equilibrium price and quantity will increase.
In the value added approach to calculating GDP, counting both the intermediate good and the final product would understate the contribution to GDP
Indicate whether the statement is true or false