3 (10 points) (a) Assume that your car has problems with the transmission, and you take it to a mechanic. Is there a principal -agent problem between you and the mechanic? Please give an explanation.

(b) If you hire a real estate agent to sell your house, is there a principal agent problem between you and the real estate agent? Please explain.

4.(10 points) A student in a managerial economics class calculated the four-firm concentration ratio and HHI for industries A and B. What is the proper conclusion she can draw from the following findings?

industry Fourdimm Concentrat 09 ratio 3.200 2500