Scenario 22-1 Esteban and Michaela Own an Apartment Building. They Hire Nico

question 431

Multiple Choice

Scenario 22-1
Esteban and Michaela own an apartment building. They hire Nico to manage the building and deal with tenants' complaints. They also hire Ted to make any necessary repairs to the apartments or the common area and they hire Rex to be the door guard at night.
-Refer to Scenario 22-1. Which of the following is an example of a moral hazard problem?

• A)Ted steals $5 off the counter in a tenant's apartment while he is there to repair a leaky faucet.
• B)Esteban and Michaela do not tell Nico that they are planning to sell the building at the end of the year.
• C)Esteban goes golfing while Michaela reviews the financials from the business.
• D)Rex is paid an efficiency wage to ensure productivity because he is usually not monitored while working.

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Definitions:

Analytical Ability

The skill of analyzing complex information or problems to identify patterns, extract key details, and solve problems logically.

Strategic Thinking

The process of analyzing critical factors and variables that will influence the long-term success of a business, policy, or project.

Professional Conduct

Professional conduct refers to the behavior and attitude expected from individuals in a professional setting, adhering to ethical standards and practices.

Small Talk

Casual or informal conversation about non-essential matters often used to initiate more substantial discussions or to fill social gaps.