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- 1. Multiple Choice
Which of the following is a case of the principal-agent problem?
The ice cream man offers you $3 for an ice cream cone. You think this is too high and try to convince him to lower the price to $2, but he won’t budge.
A car dealer tries to sell you a car. She lowers the price and throws in perks. What she doesn’t know is that the car is way outside your budget and there is no way you’ll buy it.
You pick one hotel over another because its website advertises having a pool. After you arrive, you find out the pool is closed for the season. If you’d known this, you would have picked the other hotel.
Your doctor could diagnose your symptom herself as part of your regular visit. But she receives a bonus for referrals, so she recommends you make an appointment with a specialist.
- 2. Multiple Choice
For the MNC, agency costs are typically
non-existent
larger than agency costs of a small purely domestic firm
smaller than agency costs of a small purely domestic firm
the same as agency costs of a small purely domestic firm
- 3. Multiple Choice
Which of the following is not a way in which agency problems can be reduced through corporate control?
executive compensation
the threat of hostile takeover.
acquisition of a foreign subsidiary
monitoring by large shareholders
- 4. Poll
Which is your favorite option?
A
B
C
D
- 5. Multiple Choice
Which one of the following is the best example of an agency problem? Assume the company is paying the employees' travel expenses.
Ann, the controller, travels to Orlando, Florida to visit Disney World with friends. While there, she talks with her friends about employment opportunities at the firm.
Juan, the chief financial officer, travels to France to meet with the bank that is loaning the firm money to build a factory in France. While in France, he tours Paris.
Mike, the president, travels to China to attend an international convention related to the company's line of business. While there, he tours the Great Wall of China.
Luisa, the marketing director, travels to California to attend a sales convention. While there she visits Disneyland.
- 6. Multiple Choice
In the majority of cases, the agency is the result of an agreement. Between whom?
Principal and creditor
Principal and agent
Principal, agent, and the third party
Principal and debtor
- 7. Open Ended
(Personal Question)
Please suggest to me a good series/movie to watch on Netflix/Prime.
- 8. Multiple Choice
The principal-agent problem describes a situation where:
managers disagree with employees on production issues
firms fail to achieve market power because of managerial incompetence
shareholders prevent managers from maximising profits.
managers follow their own inclinations, which often differ from the aims of shareholders
firms fail to maximise long-term investment
- 9. Multiple Choice
The principal–agent relationship entails that the principal
hires the agent.
is smarter than the agent.
provides guidance to the agent
is hired by the agent
- 10. Poll
Mirzapur VS Sacred Games. Which one is better?
Sacred Games
Mirzapur
- 11. Multiple Choice
Which of the following is not an ingredient of a principal-agent problem?
Conflict of interest.
Asymmetric information.
Equilibrium.
Surplus available.
- 12. Multiple Choice
Agency theory suggests that managers(the agents), particularly those of large, publically-owned firms, may have different objectives from those of the:
Workers
Subordinates
Shareholders
Employees
- 13. Open Ended
Yeh college kab khulega ?????
- 14. Multiple Choice
A student wants to have his broken bicycle repaired. The costs of repair are unknown, but will be at least 12 for a repairman. The student is willing to pay at most 10 for the repair of his bicycle. Which ingredient of a principal-agent problem is not satisfied?
Conflict of interest.
Asymmetric information.
Equilibrium.
Surplus available.
- 15. Multiple Choice
Statements:
(i) Agency theory relates to the relationship between management and employees.
(ii) Agency theory relates to middlemen.
Both are correct
Both are incorrect
(i) is correct (ii) is incorrect
(ii) is correct (i) is incorrect
- 16. Poll
Kyu ? Maza aaya ?
Yes
Haan
Option A
All of the above
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