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Which of the following are characteristics of a proprietorship? I. Single owner
II) Limited liability
Moral-Hazard Problem
A situation where one party engages in risky behavior knowing that it is protected against the consequences, often because another party bears the cost of those actions.
Moral-Hazard Problem
The moral-hazard problem arises in situations where one party's willingness to take risks is increased because the negative consequences of those risks will be borne by another party.
Principal-Agent Problem
A dilemma in economics where one party (agent) is supposed to act in the best interest of another (principal) but may have a tendency to act in their own interest.
Asymmetric Information
A situation in which one party in a transaction has more or superior information compared to the other.
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