The principal-agent problem is the issue of inducing A) agents ...

[tatyanajohnson]

The principal-agent problem is the issue of inducing
 
  A) agents and principals to work hard.
  B) principals to act in the best interests of agents.
  C) agents to act in the best interests of principals.
  D) None of the above answers is correct.

Question 2

How does an import quota affect the domestic price of the import, the domestic consumption, the domestic production, and the quantity imported?
 
  What will be an ideal response?

[jessicaduplan]

Answer to Question 1

C

Answer to Question 2

An import quota raises the price of the good because it decreases the amount that can be imported. As a result, domestic consumption decreases as domestic consumers decrease the quantity they demand. And, also as a result, domestic production increases as domestic producers increase the quantity they supply.