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:

Premature Babies

Infants born before completing the standard gestation period, often requiring specialized medical care.

Touch and Massage

Physical contact techniques used therapeutically to relax, heal, or soothe the body and mind.

Prenatal Development

The process of growth and development within the womb from conception to birth.

Y Chromosome

A sex chromosome found in males that is paired with either another Y or an X chromosome in determining sex.