The principal-agent model of economics concentrates on_____

a. the threat from foreign competition
b. the need to manage inventory more effectively
c. double entry book keeping
d. the potential costs of seperation of ownership control
e. the time value of money

The principal-agent model of economics concentrates on the potential costs of the separation of ownership and control. This concept explores the challenges that arise when the owner(s) of a firm (the principal) delegate decision-making authority to managers or employees (the agents). The model analyzes the conflicts of interest that may arise between the principal and the agent when they have different objectives, incentives, or information.

To answer this question, we need to understand the principal-agent model and its focus. This can be done by studying the relevant economic theories and concepts, such as agency theory. Agency theory examines the principal-agent relationship and provides insights into how conflicts can be mitigated through optimal incentive structures, monitoring mechanisms, and contractual agreements.

To gain a deeper understanding of the principal-agent model and its relevance in economics, it is recommended to study textbooks, academic articles, or attend lectures or seminars that cover this topic. By delving into the subject matter, you can grasp the nuances and applications of the principal-agent model in various economic contexts.