A factory owner wants his workers to produce as many widgets as they can, so he pays his workers based on how many widgets they produce. However, in order to make sure that the workers do not rush and produce a large number of poorly made widgets, he checks the widgets at random at various stages of their manufacture. If a defect is found in a widget, the pay of the entire section of the factory responsible for that defect is docked. How is this factory owner seeking to solve the principal - agent problem in this case?
A. By making the agents into principals themselves.
B. By ensuring that all workers co - operate to maximize the gains of their section.
C. By maximizing the information that the principal obtains about the behavior of the agents.
D. By supplying incentives so the agents act in the way principal desires.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “A factory owner wants his workers to produce as many widgets as they can, so he pays his workers based on how many widgets they produce. ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
Net income of Mansfield Company was $47,000. The accounting records reveal depreciation expense of $82,000 as well as increases in prepaid rent, salaries payable, and income taxes payable of $62,000, $25,000, and $22,000, respectively.
Answers (1)
A portfolio management organization analyzes 64 stocks and constructs a mean-variance efficient portfolio using only these 64 securities. a. How many estimates of expected returns, variances, and covariances are needed to optimize this portfolio? b.
Answers (1)
The majority of hourly workers at formatting unlimited are neither satisfied nor dissatisfied. what would herzberg recommend if your goal were to increase their level of satisfaction?
Answers (1)
Mansfield Corporation estimates its manufacturing overhead costs to be $160,000 and its direct labor costs to be $320,000 for 2012. The actual manufacturing labor costs were $80,000 for job 1, $120,000 for job 2 and $160,000 for job 3 during 2012.
Answers (1)
What conditions must exist for separate contracts to be viable?
Answers (1)
New Questions in Business
Acme Foods wants to make its chips saltier, but it doesn't want to spend more than it has to on salt. A sample of consumers are asked to compare its current chip (saltiness = 100) with saltier versions and to say whether the new version is saltier.
Answers (1)
Which of the following comparisons best isolates the impact of a change in activity on performance?
Answers (1)
If an investor anticipates an annual rental income from a leased property to be $400,000 dollars, this expected sum has a direct bearing on what the investor will pay for the property. This is an example of
Answers (1)
In comparison to industry averages, Okra Corp. has a low inventory turnover, a high current ratio, and an average quick ratio. Which of the following would be the most reasonable inference about Okra Corp.? A. Its current liabilities are too low. B.
Answers (2)
The individual with the highest valuation of the good will win in which of the following auctions? A. Sealed Bid Auction B. English Auction C. Dutch Auction D. All of the above.
Answers (1)