The Types of Problems in Principal-Agent Relationships Typically Include

question 2

Multiple Choice

The types of problems in principal-agent relationships typically include

• A)adverse selection - whom to hire
• B)moral hazard - how to motivate workers
• C)uncertainty - how many workers will be needed
• D)a and b.

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Definitions:

Skills

The ability to perform tasks and solve problems due to knowledge, practice, and aptitude.

Motivation

The internal drive or factors that prompt individuals to take action towards achieving a goal, influenced by a combination of intrinsic and extrinsic factors.

Competencies

A set of defined skills, knowledge, abilities, and attributes that contribute to high performance and are needed to achieve specific tasks or jobs.

Aptitudes

Natural abilities or talents that make it easier for individuals to learn certain skills or perform certain tasks.