ECON101 Lecture Notes - Limited Liability, Sole Proprietorship, Economic Efficiency

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bluewolf60

1 Dec 2013

School

University of Waterloo

Department

Economics

Course

ECON101

Professor

Wokia Kumase

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ECON101 Full Course Notes

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Economic efficiency: output: a,b,c are all technological efficient But only b is economic efficient(depends on the total cost: a,b,c are all technological efficient But only a is economic efficient(depends on the total cost: a,b,c are all technological efficient But only c is economic efficient(depends on the total cost) ** if we can produce the same quantity with less input, then it is technological efficient: two systems, command systems. * using a market-like mechanism to induce workers to perform in ways that maximize the firm"s profit. The bonus at the end of the year is a policy in incentive systemsto encourage workers to work hard. *works for particular industry: sells industry: mixing the systems. Using command system: when it is easy to monitor performance. Using incentive system: monitoring performance is impossible or it is costly: the principal-agent problem. >devising compensation rules that induce an agent to act in the best interests of a principal.

Related Questions

33) Which one of the following statements is not true? A) A production process is technologically efficient only if it is producing a given output at the lowest possible cost. B) If a process is economically efficient, it must be technologically efficient as well. C) Economic efficiency depends on the relative price of inputs, while technological efficiency does not D) Economically efficient firms will be more likely to survive than economically inefficient firms. E) Technologically efficient firms are more likely to survive than technologically inefficient firms.

37. Which one of the following statements is not true? A) A production process is technologically efficient only if it is producing a given output at the lowest possible cost. B) If a process is economically efficient, it must be technologically efficient as well. C) Economic efficiency depends on the relative price of inputs, while technological efficiency does not. D) Economically efficient firms will be more likely to survive than economically inefficient firms. E) Technologically efficient firms are more likely to survive than technologically inefficient firms.

42) Which one of the following statements is not true? A) A production process is technologically efficient only if it is producing a given output at the lowest possible cost. B) Technologically efficient firms are more likely to survive than technologically inefficient firms. C) Economically efficient firms will be more likely to survive than economically inefficient firms. D) If a process is economically efficient, it must be technologically efficient as well. E) Economic efficiency depends on the relative price of inputs, while technological efficiency does not

ECON101 Lecture Notes - Limited Liability, Sole Proprietorship, Economic Efficiency

ECON101 Full Course Notes

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