Question

Question 29

1. 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

1. 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

1. Backloaded compensation encourages

   		employee turnover.
   		employee rollover.
   		principals to be agents.
   		employees to stay with the firm.

3 points

Question 32

1. 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

1. 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

1. 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

1. Ways to address free riding include

   		profit-sharing.
   		subjective evaluations.
   		improved monitoring.
   		all of these choices.

3 points

Question 36

1. A firm in which market has the most market power?

   		perfect competition
   		monopolistic competition
   		oligopoly
   		monopoly

3 points

Question 37

1. 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

1. A unique resource can serve as

   		an economic profit
   		a sunk cost
   		an entry barrier
   		none of these choices

3 points

Question 39

1. Any point inside the production possibilities frontier is called

   		full employment.
   		unemployment.
   		efficient.
   		unobtainable.