Which one of the following best represents the principal-agent problem in the employer-employee relationship?
A)An employee works during a paid lunch hour in order to leave work one hour early
B)An employer fails to provide safety goggles to a worker as required by occupational safety and health legislation
C)a worker leaves work early without permission
D)A worker opts for early retirement in response to the firm's incentive plan

Question

Quizplus · Accepted Answer

The principal-agent problem occurs when an agent (in this case, the employee) makes decisions that are not in the best interest of the principal (the employer). Leaving work early without permission is a direct example of this, as it likely goes against the employer's interests or policies.

Which One of the Following Best Represents the Principal-Agent Problem