An Example of the Principal-Agent Problem Is When

question 205

Multiple Choice

An example of the principal-agent problem is when

• A) managers try to cope with employees that are inefficient.
• B) proprietors don't receive any money payment for their entrepreneurial skills.
• C) managers devise penalties that eliminate employee waste.
• D) managers devise incentives that encourage employees to act in the owner's behalf.

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Definitions:

Instrumental Learning

Instrumental learning is a learning process where behavior is modified based on the consequences it produces, such as rewards or punishments.

Classical Conditioning

The process of learning through the repeated combination of two stimuli, with the outcome being that a response initially elicited by the second stimulus is over time triggered by the first stimulus independently.

Meat Powder

A product derived from dehydrated and pulverized meat, used in various culinary or laboratory experiments.

Bell

A device that produces sound through the vibration of a metal component, often used for signaling or alert purposes.