A baseball player who has signed a long-term contract with his club and then constantly says he is injured and cannot play is an example of
A) the principal-agent problem.
B) marginal returns to work.
C) the law of diminishing returns.
D) inefficient hiring practices.

Question

Quizplus · Accepted Answer

The principal-agent problem occurs when one party (the agent) is able to make decisions that impact another party (the principal), and their interests are not aligned. In this case, the player (agent) may not be acting in the best interest of the club (principal) by claiming to be injured to avoid playing, despite having a long-term contract.

A Baseball Player Who Has Signed a Long-Term Contract with His