Economics (AS & A Level) · Feb / March 2023 · Paper 32 · Question 8

A landlord owns a house which is rented to tenants. The tenants are required to pay the electricity and water bills. The landlord is required to decorate and repair damage to the house and its gardens. What is not an example of the principal-agent problem?

1. AThe tenants forget to switch off a tap when filling a bath and water overflows, damaging the floor.
2. BThe tenants have a party and their guests cause damage to the interior of the house.
3. CThe tenants leave the lights and the TV on when they go out for an evening meal.
4. DThe tenants park their car in the garden, damaging the grass and the surrounding hedge.

As printed in the paper