1QUESTION 44

In a store that sells souvenirs, suppose an agent receives a $1 commission for each unit sold, and the principal receives the residual profit. As a result,

1. the agent will sell until the principal's marginal cost equals $1.
2. no agent would enter into such a contract.
3. the agent wishes to sell as many units as he can
4. joint profit is maximized.

QUESTION 1 2 points Save Answer A monopoly's demand curve for labor O is the same as that of a competitive market. O is below that of a competitive market. O is above that of a competitive market. O equals p * MPL. QUESTION 2 2 points Save Answer Competitive firms are able to set price above marginal cost when O all consumers have full information. O the markup is less than the cost of going to another store. O the markup is greater than the cost of going to another store. O consumers know what other stores are charging. QUESTION 3 2 points Save Answer Firms under-invest in safety because O firms are risk averse. O firms are not concerned with safety. O firms do not enjoy all of the benefits from investments in safety. O firms do not want their plants to be safe.QUESTION 48 2 points Save Answer If getting accepted into college is very difficult because of high standards of intelligence and ability, but students learn absolutely nothing while in college, it is most likely that O attendance sends a signal to employers regarding ability. they will not be hired upon graduation. O nobody will want to go to college. O a college degree is not a credible signal. QUESTION 49 2 points Save Answer If a production process creates pollution, a competitive market produces excessive pollution because O zero pollution is optimal. O people are not injured by the pollution. O the firms do not include the social cost of the pollution in their profit-maximizing decisions. O the firms place too high a price on society's cost of inflation. QUESTION 50 2 points Save Answer In the presence of a negative externality in production, a monopoly will produce O more than the social optimum. O less than the social optimum. O the social optimum. O All of these are possible.QUESTION 45 2 points Save Answer National defense is an example of O open access common property. O club good. O public good. O None of these. QUESTION 46 2 points Save Answer If diplomas work efficiently in signaling productive capabilities to employers, the resulting equilibrium O will be a separating equilibrium. O will be a pooling equilibrium. O will never be efficient. O will always be inefficient. QUESTION 47 2 points Save Answer In the presence of no externalities, O social marginal cost is less than private marginal cost. O social marginal cost exceeds private marginal cost. O social marginal cost equals private marginal cost. O social marginal cost and private marginal cost cannot be compared