The principal-agent problem in corporations exists because the managers of a firm
A) may pursue their own goals even when the result is lower profit for owners.
B) may know how to operate the business better than absentee owners do, and yet not be allowed to.
C) are generally unable to do the monitoring that would result in the firm's avoiding moral hazard problems.
D) are generally unable to do the monitoring that would result in the firm's avoiding adverse selection.
E) are generally unable to monitor workers, who do not care about the profits due the managers.
A
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The amount a firm receives after all costs have been paid.
a. Marginal Revenue b. Marginal Profit c. Profit d. Revenue
If bananas were money, which of the following functions of money would be the most difficult for bananas to satisfy?
A) medium of exchange B) store of value C) standard of value D) serving as a commodity