You are a rookie on traffic patrol. you watch as a young black man drives past you in a new silver porsche. you estimate the car’s value at around $50,000, yet the neigh- borhood you are patrolling in is characterized by low-income housing, cheap apart- ments, and tiny houses on the lowest end of the housing spectrum. you follow him and observe that he forgets to signal when he changes lanes. ordinarily you wouldn’t waste your time on something so minor.

Banana computers has decided to procure processing chips required for its laptops from external suppliers instead of manufacturing them in their own facilities. how will this decision affect the firm? a. the firm will be protected against the principal-agent problem. b. the firm's administrative costs will be low because of necessary bureaucracy. c. the firm will have more flexibility in purchasing and comparing prices of goods and services. d. the firm will have high-powered incentives, such as hourly wages and salaries.