An Example of the Principal-Agent Problem Is When

question 205

Multiple Choice

An example of the principal-agent problem is when

• A) managers try to cope with employees that are inefficient.
• B) proprietors don't receive any money payment for their entrepreneurial skills.
• C) managers devise penalties that eliminate employee waste.
• D) managers devise incentives that encourage employees to act in the owner's behalf.

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Definitions:

ASE T5

A certification exam conducted by the National Institute for Automotive Service Excellence, specifically focusing on the diagnosis, service, and repair of medium/heavy duty suspension and steering systems.

Vehicle Retarder

Auxiliary braking device used to supplement the service brakes; in most cases these convert chassis kinetic energy into hydraulic or electrical energy and are located in the driveline. Distinct from engine or transmission retarders.

Kingpin Lock

A security device that locks the kingpin of a semi-trailer to prevent unauthorized coupling or theft of the trailer.

Drive Axle

The axle specifically responsible for transmitting power from the transmission to the wheels, propelling the vehicle forward or backward.