An Example of the Principal-Agent Problem Is When

question 205

Multiple Choice

An example of the principal-agent problem is when

• A) managers try to cope with employees that are inefficient.
• B) proprietors don't receive any money payment for their entrepreneurial skills.
• C) managers devise penalties that eliminate employee waste.
• D) managers devise incentives that encourage employees to act in the owner's behalf.

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Definitions:

BPH

Benign Prostatic Hyperplasia, a non-cancerous enlargement of the prostate gland that can cause urinary problems in men as they age.

Floating Ribs

The last two pairs of ribs in the human rib cage that are not attached to the sternum or to other ribs and thus "float" freely.

Pairs

Two items, objects, or individuals that are regarded together because they are similar or complementary.

Ribs

Bone structures in the chest that protect internal organs such as the heart and lungs.