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A landlord owns a number of rental properties and wants to hire a property manager to do general maintenance. The landlord decided on a predetermined amount that he is willing to pay for property management services. The amount the landlord is willing to pay is below current market value. After interviewing multiple candidates, the job is accepted by a contractor.
1. Is there asymmetrical information inherent in this contract?
2. Is there adverse selection consequences inherent in the contract?
3. How can the two parties reduce the asymmetrical information problem inherent in this contract?
q. suppose that low-skilled workers employed in clearing woodland can each clear one acre per month if they are each
What is the externality associated with an individual driving on a congested highway? How do tolls help alleviate this externality? How should tools be set? (Hint: would you always want the toll to be the same all day?) The steel industry pollutes th..
Answer the following question for each of the following examples: (i) smoking by individuals; (ii) toxic waste production by firms. Is there any externality? If so, describe one possible externality, including references to whether it is positive or ..
In the 1960’s a group medical practice (Health Insurance Plan or HIP) undertook a large scale randomized trial to evaluate the effectiveness of mammography. The researchers followed the subjects for five years and recorded the number of deaths due to..
In the final round of a TV game show, contestants have a chance to increase their current winnings of $1 million to $2 million. If they are wrong, their prize is decreased to $500,000. A contestant thinks his guess will be right 50% of the time. Shou..
As newly appointed “Energy Czar,” your goal is to reduce the total demand for residential heating fuel in your state. You must choose one of three legislative proposals designed to accomplish this goal: a tax that would effectively increase the price..
What impact does consumer spending have on the aggregate economy? How is it similar or different from the impact that government spending have on the aggregate economy?
Illustrate what are the concepts gender planning, gender budgeting and gender mainstreaming mean.
What are the similarities and differences between the Gold Standard and the Bretton Woods System?
Suppose that all of the firms in the coal mining industry were willing and able to produce and sell 5 million tons per week at a price of $3/ton last week. This week the firms are not willing and able to produce and sell that amount at a price below ..
Brad will graduate next year. When he begins working, he plans to deposit $3,500 at the end of each year into a retirement account that pays 5% interest. How much will be in his account after 40 deposits?
She can take work at that pay rate whenever she wants. What is Shonda's opportunity cost of going to the show?
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