Which of the Following Compensation Schemes Can Be Explained as an Attempt

question 224

Multiple Choice

Which of the following compensation schemes can be explained as an attempt to solve a principal-agent problem?

• A) Real estate agents are paid on a strict commission basis; if they don't sell a client's listed property they don't get paid.
• B) Personal injury lawyers often work on a contingency basis. If the lawyer wins the case they receive a significant share of the award; if the lawyer doesn't win the case the lawyer doesn't get paid.
• C) Traveling sales people, who are costly and difficult to monitor, generally receive a significant share of their compensation in the form of commissions or bonuses for meeting sales targets.
• D) All of the above compensation schemes attempt to solve a principal-agent problem.

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Definitions:

Social Anxiety Disorder

A mental health condition marked by intense fear and avoidance of social situations due to apprehension of being judged, embarrassed, or humiliated.

Dreaded Social Situation

A dreaded social situation refers to an event or scenario that causes intense fear or anxiety for an individual, often related to social anxiety disorder.

Social Anxiety Disorder

A chronic mental health condition characterized by intense fear and avoidance of social situations due to feelings of embarrassment, self-consciousness, and concern about being judged or viewed negatively by others.

Fearful

Experiencing apprehension or anxiety, often in response to a perceived threat or danger.