Akiko and Her Friend Priyana Both Work for an Electronics

question 79

Multiple Choice

Akiko and her friend Priyana both work for an electronics store. Akiko's pay is entirely based on commission. Priyana is one of 25 salaried customer service workers who are overseen by one manager. There is a _____ possibility of _____ arising in Priyana's job than in Akiko's job.

• A)greater; signaling
• B)lesser; moral hazard
• C)greater; the principal-agent problem
• D)lesser; adverse selection

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Definitions:

Bankruptcy Situation

A legal status of a person or entity that cannot repay debts to creditors and seeks relief through court intervention.

Commercial Banks

Financial Institutions that provide a range of services such as accepting deposits, providing loans, and offering basic investment products to the public.

Investors

Individuals or entities that allocate capital to ventures, assets, or projects with the expectation of generating a financial return.

Consensus Approach

A decision-making process that seeks agreement from all participants, emphasizing collaboration and collective input.