The Principal-Agent Problem

question 71

Multiple Choice

The principal-agent problem:

• A)arises from an imbalance of information.
• B)is caused by the principal having imperfect information about the agent.
• C)is caused by the principal being unable to perfectly observe the actions of the agent.
• D)All of these statements are true.

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Definitions:

Misrepresented Warranty

A false or misleading statement about the condition or functionality of a product that can lead to a breach of warranty claim.

Respondeat Superior

A legal doctrine that holds an employer liable for the actions of an employee when the actions occur within the scope of employment.

Employer's Liability

The legal responsibility of employers to compensate employees for injuries or damages incurred in the course of employment.

Respondeat Superior

A legal principle that assigns legal liability to an employer or principal for the misconduct of an employee or agent when those actions are carried out in the course of their employment or representation.