Principles of Macroeconomics
6th Edition
ISBN: 9780073518992
Author: Robert H. Frank, Ben Bernanke Professor, Kate Antonovics, Ori Heffetz
Publisher: McGraw-Hill Education
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Chapter 3, Problem 5RQ
To determine
The usage of ‘smart for one but dumb for all’.
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Ahmed is an agent for Bader for maintaining Bader’s antique cars collection, including sale and purchase of antique cars. Ahmed has had this position for several years, but recently Ahmedhas developed a cocaine habit. He recently sold one of Bader’s cars and kept some of the money himself to buy some cocaine. Soon thereafter, Ahmed was declared bankrupt. The government then notified Ahmed that he had sold the maximum allowable number of cars in a year without getting a dealer’s license. Shortly thereafter, Bader was on a secluded island and died, which no one knew about until 2 weeks later. Discuss the effect of these events on the existence of the agency.
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Principles of Macroeconomics
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