Managers on a Fixed Salary Are Subjected to Following Temptations

question 34

Multiple Choice

Managers on a fixed salary are subjected to following temptations all the time:
I. reduced effort
II. perks or private benefits
III. empire building
IV. entrenching investments
V. avoiding risks

• A) I, II and V only
• B) I, II, and IV only
• C) I, II, III and IV only
• D) I, II, III, IV and V

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Definitions:

Surplus

The situation in which the quantity supplied of a product exceeds the quantity demanded at the current price.

Law of Supply

A fundamental principle of economics that states that, all else equal, an increase in price results in an increase in the quantity supplied, and vice versa.

Law of Demand

States that, all else being equal, as the price of a product decreases, the quantity demanded of the product will increase, and vice versa.

Rent Controls

Government-imposed limits on the amount landlords can charge for renting out a property, intended to make housing more affordable.