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B the agent wants the principal to act on his behalf

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b)the agent wants the principal to act on his behalfc)the principal wants the agent to act on the behalf of othersd)the agent wants the principal to act on the behalf of othersANS: A2)A potential problem arises in principal-agent relationshipsa)because the agents and the principals have identical goalsb)because the principals may have different goals from the agentsc)because the agents may have different goals from the principalsd)the goals of principals and agents are irrelevantANS: C
111All information provided for reference onlyJoin us onFacebook.com/thetopgrades3)A potential problem arises in principal-agent relationshipsa)because the agents' actions are not completely observed by the principalsb)because the principals' actions are not completely observed by the agentsc)because the agent's and the principals' actions are completely observed by each otherd)the observability of actions is irrelevantANS: A4)The types of problems in principal-agent relationships typically includea)adverse selection - whom to hireb)moral hazard - how to motivate workersc)uncertainty - how many workers will be neededd)a) and b)ANS: D5)In managerial economics, agency costs refer toa)booking travel arrangementsb)model and actor representationc)imperfections in dealing with those hiredd)foreign espionageANS: C6)The ways to address agency costs includea)gathering information about the agent's characteristics before hiringb)gathering information about the agent's actions once hiredc)incentivizing agents to work on behalf of principalsd)all of the aboveANS: D7)The ways to address agency costs include all EXCEPTa)advertising for employee positions in as many outlets as possibleb)requiring employees to punch time clocksc)spot checks of the quality of employee workd)replacing closed offices with cubical office spacesANS: D8)The ways to address agency costs include all EXCEPTa)running background checks on prospective employeesb)requiring employees to punch time clocksc)instituting longer work daysd)replacing closed offices with cubical office spacesANS: C9)The ways to address agency costs include all EXCEPTa)running background checks on prospective employees
112All information provided for reference onlyJoin us onFacebook.com/thetopgradesb)hiring only from jobfairsc)spot checks of the quality of employee workd)replacing closed offices with cubical office spacesANS: C10)The ways to address agency costs include all EXCEPTa)advertising for employee positions in as many outlets as possibleb)requiring employees to punch time clocksc)spot checks of the quality of employee workd)replacing closed offices with cubical office spacesANS: A11)Which of the following addresses agency costsa)spot checks of the quality of employee workb)hiring only from job fairsc)instituting longer work daysd)reducing the number of holidaysANS: A12)Which of the following addresses agency costsa)advertising for employee positions in as many outlets as possibleb)requiring employees to punch time clocksc)instituting longer work daysd)reducing the number of holidaysANS: B13)Which of the following addresses agency costsa)advertising for employee positions in as many outlets as possibleb)hiring only from job fairsc)spot checks of the quality of employee workd)reducing the number of holidays

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The Land, c Limited

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