1. A contractor needed to acquire specialized ventilators for COVID patients. This process can be iinefficient in the presence of:
a.opportunism
b.a complex contracting environment
c.spot checks
d.none of the statements are correct
2. Phillip owned the Trenton Thunder baseball team but allowed Marybeth to manage the operations of the team while he lived full time in Aruba. A drawback of separating ownership from management control within baseball the team is best reflected by a/the:
a.the loss of specialization
b.increased transactions costs
c.the principal-agent problem
d.inability to create synergies within the team
3.Hertz wishes to incentivize its CEO to achieve corporate goals. A wage function for the CEO is given by W = 512,000 + 0.0025π + 0.01S. Here W is wage, π is profit and S is sales. Given profits are $200 million, and sales are $400 million, what percent of the Hertz's CEO's salary is tied to profits of the firm? (nearest tenth)
a.10.2%
b.7.2%
c.19.8%
d.21.0%
4.Which of the following hypothetical and/or real mergers is an example of vertical intergration?
a.AT&T purchases MCI
b.Coca-Cola purchases PepsiCo
c.Netflix acquires Myrlove Production Studios
d.Tesla acquires a Renault/Nissan