A Principal-Agent Problem Arises When

question 28

Multiple Choice

A principal-agent problem arises when

• A)only less-qualified workers apply for a job
• B)a firm must find a proxy for unobservable qualities needed in employees
• C)potential employees have more information about their own productivity than do prospective employers
• D)a customer knows little about the service provided by a business
• E)a customer knows little about the service provided by a business and is, therefore, given poor service

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Definitions:

Emotionally Energized

The state of being energized, motivated, or driven by emotions, leading to increased productivity or creativity.

Exercise

Physical activities undertaken with the purpose of maintaining or improving health and physical fitness.

Technical Skills

Specific abilities and knowledge related to practical tasks within particular fields, requiring specialized training or experience.

Supervisor

A person in authority who oversees and directs the work of others, ensuring tasks are completed efficiently and effectively.