Q1. Given that the income of franchise restaurant manager is directly tied to profits and the income of the manger of the company-owned restaurant is paid a flat fee, we might expect profits to be:

A. higher in company-owned restaurants.

B.lower in company-owned restaurants.

C. equal in both types of restaurants.

D. None of the statements are correct

Q2. Mandy' cost of making a bag is $120. She sells the bag at $180 to Otis. The maximum amount that Otis is willing to pay for the bag is $200( he did not tell Mandy about this). Total gain from the exchange is?

A. $20

B. $60

C. $0

D. $80

Q3. If a situation is inefficient, please select one:

A. There is no way somebody can be made better off without someone else made worse off.

B. It is a desirable state.

C.an opportunity for mutually-beneficial gain arises.

D. It is an undesirable state whereby there is no more chance for further net gain.