YouTube Star Logan Paul Started Being Dropped by His Sponsors

question 15

Multiple Choice

YouTube star Logan Paul started being dropped by his sponsors after he ______.

• A)produced an anti-Semitic video
• B)produced a video mocking the products produced by three of his biggest sponsors
• C)was caught copying video ideas from YouTube star PewDiePie
• D)produced a video showing him having a conversation with and about a suicide victim's corpse hanging from a tree in Japan

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Definitions:

Principal-Agent Problem

A scenario in which conflicts of interest arise because the goals of a principal (e.g., a shareholder) do not align with those of an agent (e.g., a company executive).

Moral Hazard Problem

The possibility that individuals or institutions will behave more recklessly after they obtain insurance or similar contracts that shift the financial burden of bad outcomes onto others. Example: A bank whose deposits are insured against losses may make riskier loans and investments.

Adverse Selection Problem

A problem arising when information known to one party to a contract or agreement is not known to the other party, causing the latter to incur major costs. Example: Individuals who have the poorest health are most likely to buy health insurance.

Common Good Problem

Common Good Problem occurs when resources that are freely accessible to all members of a society are overused or depleted, often leading to sustainability issues.