The fact that employees often take longer lunch breaks than they are supposed to is an example of
A) the principal-agent problem.
B) moral hazard.
C) adverse selection.
D) a golden parachute.

Question

Quizplus · Accepted Answer

The principal-agent problem arises when there is a conflict of interest between the principal (employer) and the agent (employee) leading to behavior that is not aligned with the employer's interests. In this case, employees taking longer lunch breaks than they are supposed to is an example of shirking (not working as efficiently as possible) which is a common manifestation of the principal-agent problem.

The Fact That Employees Often Take Longer Lunch Breaks Than