Greg, Who Wants to Sell a Car He Owns, Authorizes

question 16

Multiple Choice

Greg, who wants to sell a car he owns, authorizes his concierge, Walter, to find a potential buyer and finalize a deal above a stipulated price. Walter contracts Jacob, an independent car sales broker, and instructs him to only find a potential buyer and send them over to Walter for the sale. Greg then contracts CarWreckers, an automobile modification company to renovate his car. CarWreckers completes its work and Greg pays them. Jacob then searches for a suitable buyer and finds one in Carl. Carl buys the car and Jacob is paid for his services. Who is the principal during the car sale transaction?

• A) CarWreckers
• B) Carl
• C) Greg
• D) Walter

---

Definitions:

Production Possibilities Frontier

A curve depicting all maximum output possibilities for two or more goods given a set of inputs (resources, labor, etc.), assuming all resources are fully utilized.

Production Possibilities Frontier

A graph that shows the combinations of two goods the economy can possibly produce given the available resources and technology.

Unemployed Resources

Assets, labor, or capital that are available but not currently being used in the production of goods or services.

Production Possibilities Frontier

A graphical representation that shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently utilized.