How Is Consent Established in an Agency Relationship

question 3

Multiple Choice

How is consent established in an agency relationship?

• A)The principal must ask the agent to do something and the agent must agree.
• B)The principal gives consideration to the agent.
• C)The principal and agent must have a written,notarized agreement.
• D)All of these are correct.

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Definitions:

Nonexcludable Problem

An issue characteristic of public goods, where it is not possible to prevent individuals who do not pay from consuming a good or service.

Optimal Level

The most favorable or efficient level of output or activity under given conditions, maximizing benefits or minimizing costs.

Public Good

A good that is non-excludable and non-rivalrous, meaning it can be used by everyone and one person's use does not diminish another's.

Free-rider Problem

A situation where individuals consume a good without contributing to its cost, typically in the context of public goods.