Copious Corp

question 68

Multiple Choice

Copious Corp.is owned by 2 million stockholders who elect a board of directors that selects a management team responsible for hiring workers to serve customers by selling and repairing computer mice.Which of the following statements is true?

• A)In the principal-agent relationship between workers and customers, the customers are the agents.
• B)In the principal-agent relationship between workers and managers, the managers are the agents.
• C)In the principal-agent relationship between the stockholders and the board of directors, the stockholders are the agents.
• D)In the principal-agent relationship between the stockholders and the customers, the stockholders are the agents.
• E)In the principal-agent relationship between management and the board of directors, the managers are the agents.

---

Definitions:

Utility Function

A mathematical formula that represents a consumer's preference ranking for various bundles of goods.

Budget Line

A graphical representation that shows all the possible combinations of two goods or services that can be purchased with a given budget, keeping the price of both goods constant.

Utility Function

A mathematical expression that ranks alternatives according to their utility to an individual, indicating the level of satisfaction or preference.

Nuts

Apart from the common understanding as a type of food, in an economic or financial context, "nuts" does not have a specific definition.