An Example of the Principal-Agent Problem Occurs When

question 18

Multiple Choice

An example of the principal-agent problem occurs when

• A)an agent is more motivated than the principle to provide a high-quality good or service.
• B)managers try to cope with employees that are inefficient.
• C)sole proprietors don't receive any money payment for their entrepreneurial skills.
• D)managers devise penalties that eliminate employee waste.
• E)managers devise incentives that encourage employees to act in the owner's behalf.

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Definitions:

Negative Habit

A detrimental pattern of behavior that is often hard to give up and can impact an individual’s health or wellness adversely.

Bad Habit

A negative behavior pattern that is often difficult to break.

Substitution

The process of replacing one element with another, especially in mathematical equations or linguistic expressions.

Transitional Expression

Connective elements in writing that help to smoothly bridge thoughts and sections, enhancing readability.