Which Is NOT an Example of a Principal-Agent Problem

question 128

Multiple Choice

Which is NOT an example of a principal-agent problem?

• A) A union president makes a move to expand membership and strengthen his support,even though it compromises representation of current members.
• B) Gwendolyn is visiting an unfamiliar city and takes a taxi to travel between destinations.The cab driver takes inefficient routes in order to increase her fare.
• C) A U.S.representative gets legislation passed in order to fund a road project in her home district,despite opposition from nearly half of her colleagues.
• D) Employees at a restaurant loaf around when the manager leaves for a few hours to purchase supplies.
• E) An instructor carelessly grades an important exam in order to have more free time on the weekend.

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Definitions:

Public Policy

Guidelines and policies adopted by a governing body that reflect the social and economic priorities of the community.

Act of Termination

A formal action or event that concludes or terminates a contract, agreement, employment, or other legal relationships.

Fortune 500 Corporations

An annual list compiled and published by Fortune magazine that ranks 500 of the largest United States corporations by total revenue for their respective fiscal years.

Female Employees

Women who are employed by an organization, company, or business, and are part of the workforce.