The principal-agent problem, as applied to the labor market, would have the
A) employer as the agent and the worker as the principal.
B) employer as the principal and the worker as the agent.
C) employer and worker as the principals, and the customer as the agent.
D) customer as the principal, and the employer and worker as the agents.

Question

Quizplus · Accepted Answer

In the principal-agent problem in the labor market, the employer is the principal who hires the worker (agent) to perform tasks. The challenge is ensuring the agent acts in the principal's best interest.

The Principal-Agent Problem, as Applied to the Labor Market, Would