AGEC 3503 Chapter : AGEC3503 Chp1 Pg3

1. Which of the following describes most businesses in the United States?

A. Proprietorships

B. Partnerships

C. Corporations

 

2. Business structures where the ownership and management are separate, as with corporations, are likely subject to principal-agent problems. Which of the following may help reduce such problems and promote cost efficiency? Check all that apply.

A. Profit-sharing agreements with managers

B. Competition among firms for customers

C. Competition among firms for investment funds