Which of the Following Is an Example of an Indirect

question 42

Multiple Choice

Which of the following is an example of an indirect agency cost?

• A)A company buys the latest computer equipment for its employees.
• B)Senior management use company money to pay their children's education.
• C)Managers can use the company float plane to fly to their cottages on weekends.
• D)Managers may take risky projects when the company is not doing well.

Understand the fundamental differences between capitalism and socialism.

Comprehend the concept of market surplus including consumer surplus and producer surplus.

Calculate the impacts of taxes on market transactions and prices.

Grasp the conditions under which transactions create wealth or surplus.

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Definitions:

Inadequate Consideration

This term implies an agreement in which the value exchanged between two parties is significantly disproportionate, questioning the fairness of the deal.

Promissory Estoppel

A legal principle that prevents a promisor from denying the promise or going back on it if the promisee has reasonably relied on the promise to their detriment.

Promisee

The individual or entity to whom a promise or commitment is made in an agreement.

Reliance

Acting based on trust in something or someone, or in contract law, actions taken based on a promise or agreement.