Which of the Following Offers an Explanation as to Why

question 60

Multiple Choice

Which of the following offers an explanation as to why the principal-agent problem exists for a firm?

• A)The firm cares less about profit and more about cost when there are many competitors in the market.
• B)The firm offers an employee-incentive program in which employees share in the firm's profits.
• C)The firm operates in a market with many competitors forcing the firm to pay its employees more to keep them from switching to another firm.
• D)The firm operates to maximize profit while the employees attempt to work as little as possible to earn their paychecks.

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Definitions:

Identity

The condition or character as to who a person or what a thing is; a distinctive characteristic defining individuals or groups.

DNA

Deoxyribonucleic acid, the hereditary material in humans and almost all other organisms that contains the instructions necessary for building and maintaining an organism.

Gene

Section of DNA having the same arrangement of chemical elements.

Amine

Organic compounds derived from ammonia by replacement of one or more hydrogen atoms by hydrocarbon or other radicals; they play essential roles in biology as building blocks of proteins and neurotransmitters.