Explicit costs correct answers Out-of-pocket production expenses recorded using the accounting method
Implicit costs correct answers Measure the alternative uses of 3 types of resources, such as physical capital, interest payment, and time
Normal profit correct answers The income associated w...
Econ B251 Final Exam(100% Guaranteed)
Explicit costs correct answers Out-of-pocket production expenses recorded using the accounting method
Implicit costs correct answers Measure the alternative uses of 3 types of resources, such as physical
capital, interest payment, and time
Normal profit correct answers The income associated with the entrepreneur
Command system correct answers When workers follow directions from their boss above them and
provide feedback to their boss
Incentive system correct answers When firms have a well-defined and well incentivized organizational
hierarchy to help maximize profit
Perfect information correct answers Occurs when all relevant information is known to everyone
Imperfect information correct answers Occurs when not all pertinent information is known to all decision-
makers
Symmetric information correct answers Everyone has the same amount of information
Asymmetric information correct answers Occurs when the amount of information differs among decision-
makers
Adverse selection correct answers Occurs when buyers or sellers have more information than the other
Moral hazard correct answers When more informed individuals have an incentive to behave or act
differently because they do not bear the total costs of their actions
Principal-agent problem correct answers Occurs when principals'(business owners) and agents'(workers)
self-interests are not aligned
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