In which of the following situations is the principal-agent problem least likely to occur?
a. a hospital stay
b. a doctor's visit
c. a bartender serves you at the bar
d. your TV is repaired
e. a stockbroker calls with financial advice
C
Economics
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What is one reason "micro-managers" might be less successful than so-called "delegators"?
A) Delegators are smarter. B) Delegators enjoy increasing returns to scale. C) Micro-managers suffer decreasing returns to scale. D) Micro-managers have constant returns to scale.
Economics
Why can't private individuals always internalize an externality without the help of government?
a. Legal restrictions prevent side payments between individuals. b. Transactions costs may be too high. c. Side payments between individuals are inefficient. d. Side payments between individuals are insufficient.
Economics