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5. (10 points) (a) Does a Principal Agent problem exist between stockholders and managers of a rm? Please give an explanation. (Note: Stockholders are those
5. (10 points) (a) Does a Principal Agent problem exist between stockholders and managers of a rm? Please give an explanation. (Note: Stockholders are those who own stock (shares) of a company. Managers and workers are employees of the company.) (b) Does a Principal-Agent problem exist between workers of a rm and consumers of the rm's products? Please give an explanation. (Note: Managers and workers are employees of the company. Consumers are customers of the company.)
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