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...
Higher input prices result in
A) upward shifts of MC and reductions in output. B) upward shifts of MC and increases in output. C) downward shifts of MC and reductions in output. D) downward shifts of MC and increases in output. E) increased demand for the good the input is used for.
In economics we assume that the goal of a firm is to
A) minimize costs. B) maximize revenue. C) maximize economic profits. D) maximize total sales.
Average variable cost:
a. first tends to decrease, and then increase as output expands. b. remains unchanged as output expands c. always increases as output increases. d. always decreases as output expands.
Assume the demand function for good X can be written as Qd = 80 - 3Px - 6Py + 10I, where Px = the price of X, Py is the price of Y and I is consumer income. If the price of Y decreases by 5 dollars, what would the reduction in Px have to be in order to keep the quantity demanded of Xunchanged by the change in the price of Y?
A) decreased by 10 dollars B) decreased by 5 dollars C) decreased by 2.5 dollars D) decreased by 1 dollar