Corporations that offer incentive pay schemes that link pay to meeting profit, production, or sales targets are doing so to cope with the
A) scarcity problem.
B) inefficiencies usually found in large firms.
C) principal-agent problem.
D) problems of unionization.
Ques. 2The demand for labor is a derived demand because it is derived from
A) the supply of labor.
B) union pressure.
C) the demand for the output the labor produces.
D) natural law.
Ques. 3In the above figure, the aggregate demand curve is AD2, so the long-run equilibrium level of real GDP is
A) 16 trillion.
B) 16.5 trillion.
C) more than 16 and less than 16.5 trillion.
D) None of the above answers is correct.
Ques. 4Suppose U.S. net exports are -400 billion and the U.S. government sector surplus is 200 billion. Then in the private sector, saving minus investment equals
A) -600 billion.
B) -200 billion.
C) +600 billion.
D) +200 billion.
Ques. 5Suppose the equilibrium interest rate in the money market is 5 percent and the current interest rate is 7 percent. As a result
A) the interest rate rises.
B) real GDP increases.
C) the demand for money curve shifts rightward.
D) people buy bonds and the interest rate falls.
Ques. 6After Hurricane Sandy, FEMA (the Federal Emergency Management Agency) advertised in a New Jersey radio station how people affected by the hurricane could file for assistance.
In the political marketplace, the decision makers in FEMA are best characterized as A) voters.
B) firms.
C) politicians.
D) bureaucrats.
Ques. 7Total utility is maximized when the ________ for all goods.
A) marginal utility per dollar spent is equal
B) marginal utilities are zero
C) marginal utilities are maximized
D) marginal utilities are negative
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