Refer to the information provided in Figure 2.5 below to answer the question(s) that follow. Figure 2.5Refer to Figure 2.5. The marginal rate of transformation in moving from Point A to Point B is

If a firm was owned by its employees,

A) there is a higher probability that wage reductions would outweigh layoffs. B) those in charge would not act any differently than regular owners; there would still be layoffs. C) those not in charge would remain risk neutral. D) wage reductions would be lower than if the firm was run for profit.

According to William Niskanen's model of bureaucracy, Congress tends to approve a bureau's budget at a level where

a. the marginal value of the last unit of the bureau's output is greater than the marginal cost. b. the marginal cost of the last unit of the bureau's output is greater than the marginal value. c. the marginal value of the last unit of the bureau's output equals the marginal cost. d. the marginal cost of the last unit of the bureau's output is zero.