Which Is NOT an Example of a Principal-Agent Problem

question 128

Multiple Choice

Which is NOT an example of a principal-agent problem?

• A) A union president makes a move to expand membership and strengthen his support,even though it compromises representation of current members.
• B) Gwendolyn is visiting an unfamiliar city and takes a taxi to travel between destinations.The cab driver takes inefficient routes in order to increase her fare.
• C) A U.S.representative gets legislation passed in order to fund a road project in her home district,despite opposition from nearly half of her colleagues.
• D) Employees at a restaurant loaf around when the manager leaves for a few hours to purchase supplies.
• E) An instructor carelessly grades an important exam in order to have more free time on the weekend.

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Definitions:

Exclusive Ownership

The right to use, manage, and dispose of property without interference from others, ensuring complete control over the asset.

Joint Tenancy

A form of co-ownership where parties own property equally with rights of survivorship, meaning if one owner dies, the other automatically inherits the deceased owner's share.

Easement

A right to cross or otherwise use someone else's land for a specified purpose.

Leasehold

A possessory interest, but not an ownership interest, transferred by contract (lease).