Which of the following is not required for the "invisible hand" described by Adam Smith to benefit society?

A. Property rights must be well defined.

B. Property rights must be clear and enforced by law.

C. Both parties to a transaction must be rational and well informed.

D. Both parties to a transaction must care about each other, and want to make the other person happy.

In order for a kickback to take place:

A. Someone must have the authority & responsibility to decide how to spend money of others.

B. Government officials must be corrupt (but those in private business may be honest).

C. Those in private business must be corrupt (but government officials may be honest).

D. Rich people must have more political power than poor.

Which of the following is true in the principal agent model?

A. The principal has more information and may shirk by behaving in a way contrary to the agent's interest.

B. The agent has more information and may shirk by behaving in a way contrary to the principal's interest.

C. The agent has less information and may shirk by behaving in a way contrary to the principal's interest.

D. The principal has less information and may shirk by behaving in a way contrary to the agent's interest.