A ______________ Relationship Is One in Which an Agent Acts

question 204

Multiple Choice

A ______________ relationship is one in which an agent acts on behalf of or for the principal,with a degree of personal discretion.

• A)principal-agent
• B)master-servant
• C)employer-employee
• D)employer-independent contractor
• E)none of the other choices are correct

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Definitions:

Positive Externality

A benefit that affects someone who did not choose to incur that benefit, often associated with public goods or services.

Profit-Maximizing

The process or strategy employed by businesses to determine the price and output level that delivers the maximum possible profit.

Externality

A side effect or consequence of an industrial or commercial activity that affects other parties without this being reflected in the cost of the goods or services involved.

Efficient Level

The point at which resources are utilized in the most productive way, maximizing output or satisfaction without wasting any resources.