If a Firm Is the Sole Employer of a Factor

question 172

Multiple Choice

If a firm is the sole employer of a factor of production, it is known as

• A)a monopoly.
• B)a competitor.
• C)a monopsony.
• D)an economically discriminating firm.

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Definitions:

Principal-Agent Problem

An economic conflict where an individual (the agent) has the responsibility to act for the benefit of another party (the principal), but might fail to do so because of differing interests.

Representative Democracy

A form of government where citizens elect officials to represent their interests and make decisions on their behalf in the legislative process.

Private Business

A business entity owned and operated by private individuals, not controlled by the government, and aimed at earning profit.