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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?
bill operates a boat rental business in a competitive industry. he owns 10 boats and pays 1000 per month on the loan
Ron Swanson takes 1 week to make a rocking chair or a bird house. Andy Dwyer would take 3 weeks to make a chair or 2 weeks to make a bird house. Assume that both people are okay with having partially-completed projects (e.g. half a chair) because the..
q. 1. patent systems can be worthwhile if induced innovations are important also if the rewards from patents speed them
How and why are a training program and a communications system important in developing an effective ethics program? What does ethical compliance involve and how can it be measured? What role does leadership play in influencing organisational behaviou..
A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009. It also reported a GDP deflator of 85 in 2010 and 100 in 2009.
Explain each and differentiate between these three types of securities, a Stock, Mutual Fund, and Exchange Traded Fund (ETF)
The company makes no deposits during the subsequent 5 years. If the bank pays 8% interest, how much would be in the account at the end of 15 years?
How can having panel data (with T=2 and n sufficiently large) help solve the omitted variables problem if the omitted variables are time invariant (don’t vary over time)?
Consider the market for cars in a small country. Suppose the demand and supply curves for cars have been estimated and are given by. Suppose the prevailing price is the (free-trade) world price pF T = 4.5. At this price, what is the quantity demanded..
Dave’s Dogs is a firm that originally sold hotdogs and soft drinks from a cart located in front of City Hall. Then Dave purchased another hotdog cart and hired someone to sell hotdogs and soft drinks near the high school. Both locations have been suc..
Firm C produces 1,000 pounds of cotton at a cost of 50 cents per pound. They sell all of the cotton to Firm S for 75 cents per pound. Firm S makes 1,000 t-shirts with the cotton for a total cost of $1.50 per t-shirt. They sell all of the shirts to Fi..
In the debate on fixed versus floating exchange rates, the strongest argument for a floating rate is that it frees macroeconomic policy from taking care
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