A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would ...

A shoe salesman working on commission must decide whether to work hard or shirk. Working hard would increase the probability of a sale from 20 to 70 but would cost him 5 . If the average price of shoes is 100, what is the minimum commission rate would induce him to work hard?
 a. 4
 b. 6
 c. 8
 d. 10

QUESTION 2

According to the law of diminishing returns,
 a. Some productions factors are fixed
  b. All inputs are variable
  c. All inputs are fixed
  d. None of the above

QUESTION 3

The introduction of seat belts increased the number of accidents, even though the number of fatalities decreased. This is most likely a result of
 a. Moral hazard
 b. Adverse selection
 c. seat belts distracting drivers
  d. None of the above

QUESTION 4

A firm produces 100 . units per week. It hires 10 full-time workers (40 hours/week) at an hourly wage of 20 . Raw materials are ordered weekly and they costs 5 for every unit produced. The weekly cost of the rent payment for the factory is 1,500 . How do the overall costs breakdown for the week?
 a. total variable cost is 5,000 . total fixed cost is 1,500 . total cost is 6,500
  b. total variable cost is 5,000 . total fixed cost is 9,500 . total cost is 14,500
  c. total variable cost is 13,000 . total fixed cost is 1,500 . total cost is 14,500
  d. total variable cost is 13,000 . total fixed cost is 9,500 . total cost is 22,500

QUESTION 5

US Exports After staying around 1.35 US dollars per Euro for years, the exchange rate fell below 1.25 US dollars to a euro during the summer of 2014 . What affect does this have US exports to Europe?

QUESTION 6

____________is the problem of preventing you from acting opportunistically after buying insurance
 a. Moral hazard
 b. Adverse selection
  c. Decision making
 d. None of the above