Principal-agent theory deals with the problem of: designing an efficient contract between the employer and the employee when there are incentives to cheat or shirk. failed negotiations between workers and their employees. designing an optimal compensation system to reduce turnover. designing an optimal compensation when there is perfect information.
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- how can you relate the compensation design with a principal agent relationship in a firm? what cost does ESOPs ( employee stock options) tend to reduce, explain and why is there a need to reduce these costs?Please construct table and find equilibrium using STRICT LIABILITY with full compensationDetermine which account of the Balance-of-Payments is affected by the following transaction: You travel to the United States for holiday and spend US$500 Select one: O a. Current Account - Imports O b. Capital Account - Portfolio Investment O. Current Account - Exports O d. Capital Account - Foreign Direct Investment e. Current Account - Transfers
- In order to reduce agency problems, managers may be provided compensation that includes: Select one: a. an option to buy the company's stock on b. incentive pay for achieving higher sales than last year c.a fixed salary so managers' pay is not at risk, allowing managers to focus on the company's business d. a bonus based on the level of profit achieved during the yearIs this how information is distributed in a normal organizational hierarchy?Your friend is a Vice President of HR. He says, “Most CEO’s, when asked by the Board ofDirectors to resign, fight to keep their jobs.” Is this correct?
- Which of the highest-paid CEOs in US businesses are involved in healthcare or related industries (insurance, pharmaceuticals, etc).Classify each statement as either true or false. A tournament compensation scheme is subject to ability risk.. Josephina receives the largest bonus because she had the highest sales last month. Jana had the second highest sales and receives the second largest bonus. This is an example of a tournament compensation scheme. Professors who grade on a curve are using a tournament compensation scheme. Answer Bank truc false 000A farmer’s fields are right next to the train tracks, where sparks from the trains set the field on fire. The railroad profit from running zero, one, two or three trains is shown below. The columns indicate the number of trains running. Total railroad profits are the total profits to the railroad from running the specified number of trains. Total lost farmer profits are total profits the farmer loses from a specified number of trains running. Trains 0 1 2 3 Total Railroad Profit. $200 $300 $350 $410Total Lost Profit for Farmer $0 $100 $125 $300 1) How many trains will run if the farmer is granted a liability right to be free of sparks and there are no transaction costs…
- A farmer’s fields are right next to the train tracks, where sparks from the trains set the field on fire. The railroad profit from running zero, one, two or three trains is shown below. The columns indicate the number of trains running. Total railroad profits are the total profits to the railroad from running the specified number of trains. Total lost farmer profits are total profits the farmer loses from a specified number of trains running. Trains 0 1 2 3 Total Railroad Profit. $200 $300 $350 $410Total Lost Profit for Farmer $0 $100 $125 $300 1) If a court grants the railroad the property right throw sparks, and transaction costs are $1400 (split evenly by the…A farmer’s fields are right next to the train tracks, where sparks from the trains set the field on fire. The railroad profit from running zero, one, two or three trains is shown below. The columns indicate the number of trains running. Total railroad profits are the total profits to the railroad from running the specified number of trains. Total lost farmer profits are total profits the farmer loses from a specified number of trains running. Trains 0 1 2 3 Total Railroad Profit. $200 $300 $350 $410Total Lost Profit for Farmer $0 $100 $125 $300 1) What is social welfare at the socially optimal number of trains? a) 200 b) 225 c) 210 d) 350…A farmer’s fields are right next to the train tracks, where sparks from the trains set the field on fire. The railroad profit from running zero, one, two or three trains is shown below. The columns indicate the number of trains running. Total railroad profits are the total profits to the railroad from running the specified number of trains. Total lost farmer profits are total profits the farmer loses from a specified number of trains running. Trains 0 1 2 3 Total Railroad Profit. $200 $300 $350 $410Total Lost Profit for Farmer $0 $100 $125 $300 1) What is social welfare at the socially optimal number of trains? a) 200 b) 225 c) 210…