5 1.0p Which statement is not in line with the Property Rights Theory proposed by Grossman, Hart and Moore? 11 When a firm owns a step in the production chain, It obtains the residual rights, which can incentivizet to invest more in specific assets needed in this step When specific investments are necessary on both sides, integration is always the best option to organize an economic transaction. Asset ownership plays an important role in economic transactions, because complete contracts are not a feasible way to organize real-life transactions. Forward integration is a good way to organize ownership of a production chain if the upstream firm O needs to make larger specific investments and has a bigger impact on the final output than the downstream firm. 8 1.0p Which of the following statements on principal agent problems is correct? [t Principal-agent problems can arise even when the objectives of the principal and agent are perfectly aligned O A principal-agent problem can only arise if the principal cannot perfectly observe the agent's actions or private information O None of the other statements on principal-agent problems is correct. O Implementing bureaucratic procedures is never a good way to combat principal-agent problems because it creates red tape