Which Three of the Following Relate to the Owner- Control

question 38

Multiple Choice

Which three of the following relate to the owner- control argument?

• A) Owners can only exert effective control by becoming agents of the company.
• B) Managers should have to ask for investment funds; this subjects their plans to scrutiny.
• C) Firms should be encouraged to distribute a high proportion of earnings.
• D) Investors can reduce the principal- agent problem and achieve greater goal congruence by taking suitable actions.

Apply the concept of utility maximization to allocate resources effectively between different choices.

Evaluate comparative advantage and how it determines production specialization between individuals or entities.

Understand the relationship between production possibilities and Pareto optimality in resource allocation.

Interpret how marginal rates of substitution influence consumer choices and the allocation of resources.

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