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Question 29 A problem associated with the principal-agent relationship is imperf

ID: 1101772 • Letter: Q

Question

Question 29

A problem associated with the principal-agent relationship is

imperfect information.

perfect information.

the low costs of monitoring behavior.

none of these choices.

3 points   

Question 30

A problem with teams is that individuals

are too individualistic to work with others.

prefer piecework pay schemes.

tend to free ride.

none of these choices.

3 points   

Question 31

Backloaded compensation encourages

employee turnover.

employee rollover.

principals to be agents.

employees to stay with the firm.

3 points   

Question 32

Being paid a wage more than your opportunity costs is an example of

economic profit.

normal profit.

an accounting cost.

an efficiency wage.

3 points   

Question 33

Free riding is a problem

if an individual's contribution to a team is not easily measured.

if an individual's contribution is to a team is easily measured.

when monitoring is costless.

when team members are altruistic.

3 points   

Question 34

The board of directors and the CEO

do not have a principal/agent relationship.

are agent and principal, respectively.

are principal and agent, respectively.

are one in the same for small corporations.

3 points   

Question 35

Ways to address free riding include

profit-sharing.

subjective evaluations.

improved monitoring.

all of these choices.

3 points   

Question 36

A firm in which market has the most market power?

perfect competition

monopolistic competition

oligopoly

monopoly

3 points   

Question 37

A graphical representation of the choices between two allocations of resources is called

the production possibilities frontier.

supply and demand.

the free choice model.

the moral hazard model.

3 points   

Question 38

A unique resource can serve as

an economic profit

a sunk cost

an entry barrier

none of these choices

3 points   

Question 39

Any point inside the production possibilities frontier is called

full employment.

unemployment.

efficient.

unobtainable.

imperfect information.

perfect information.

the low costs of monitoring behavior.

none of these choices.

Explanation / Answer

29. imperfect information.

30. tend to free ride.

31. employees to stay with the firm

32. economic profit.

33. if an individual's contribution to a team is not easily measured.

34. are principal and agent, respectively.

35. all of these choices.

36. monopoly

37. the production possibilities frontier

38. an entry barrier

39. unemployment.

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