Scenario: Edward Has Inherited a House

question 19

Multiple Choice

Scenario: Edward has inherited a house. As the house is far away from where he lives currently, it has been vacant for the past few years. A housekeeper is paid regularly to look after the house and keep it clean. However, because Edward seldom visits the house, the housekeeper does not clean the house regularly.
-Refer to the scenario above.Identify the correct statement in this case.

• A) Edward is a rent seeker.
• B) The housekeeper is a free rider.
• C) The problem can be solved through government intervention.
• D) The relationship between Edward and the housekeeper is an example of a principal-agent relationship.

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Definitions:

Alteration in Nature

Significant changes to the natural environment, often due to human activity or environmental phenomena.

Partnership Property

Assets acquired or owned by a partnership, used in conducting the partnership's business.

Right of Survivorship

A legal principle where, upon the death of one joint owner, the deceased's share automatically transfers to the surviving co-owner(s), bypassing probate.

Partnership Agreement

A contract between business partners detailing the business structure, distribution of profits and losses, and operational rules.