The ways to address agency costs include all EXCEPT
a. running background checks on prospective employees
b. hiring only from job fairs
c. spot checks of the quality of employee work
d. replacing closed offices with cubical office spaces
QUESTION 2Consider a firm that produces 500,00 . units per year. The firm's fixed costs are 100,000 . marginal costs are 250 and the price per unit is 400 . In the short-run, how low can price go before it is profitable to shut down?
a. 150
b. 250
c. 250.20
d. 400
QUESTION 3The ways to address agency costs include all EXCEPT
a. running background checks on prospective employees
b. requiring employees to punch time clocks
c. instituting longer work days
d. replacing closed offices with cubical office spaces
QUESTION 4The ways to address agency costs include all EXCEPT
a. advertising for employee positions in as many outlets as possible
b. requiring employees to punch time clocks
c. spot checks of the quality of employee work
d. replacing closed offices with cubical office spaces
QUESTION 5Which of the following will increase the break-even quantity?
a. A decrease in overall fixed costs
b. A decrease in the marginal costs
c. A decrease in the price level
d. An increase in price level
QUESTION 6Which of the following is classified as a sunk cost?
a. Cost of the next best alternative
b. Additional cost of producing an additional unit
c. Research costs to determine the implementation of a technology
d. Total cost of producing a product
QUESTION 7The ways to address agency costs include
a. gathering information about the agent's characteristics before hiring
b. gathering information about the agent's actions once hired
c. incentivizing agents to work on behalf of principals
d. all of the above
QUESTION 8Which of the following variables is not needed to determine the break-even quantity?
a. Marginal costs
b. Fixed Costs
c. Selling Price
d. Average Costs
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