How does the principal-agent problem extend to managers and employees?
What will be an ideal response?
Just as corporate shareholders (owners) cannot consistently monitor managers, managers cannot always monitor employees of the corporation. As a result, corporate employees may not have the same goals as their managers.
You might also like to view...
A shift in the supply curve for gasoline in the United States would result if
a. people decided to travel more by automobile. b. the OPEC nations decided to stop sales of crude oil to the United States. c. the price of gasoline increased. d. the price of gasoline decreased.
As of the end of 1994 which of the countries in our survey had the largest proportion of stock held by the government?
A) The United Kingdom B) The United States C) Japan D) Germany
Which of the following is not a developing country classified as a high-income economy because of possessing huge oil reserves?
a. United Arab Emirates b. Chad c. Qatar d. Kuwait e. Bahrain
Tim decides to spend four hours playing video games rather than attending his classes. His opportunity cost of playing games is
a. the value of the knowledge he would have received had he attended his classes. b. the $50 he could have earned if he had worked at his job for those four hours. c. the value of his time playing video games minus the value of attending classes. d. nothing, since he valued playing video games more than attending classes.