Professor Mitchell mentioned that America's large cities are very complex to manage. If we think of an elected mayor as the agent and the voters as principals, which of the following best reflects the principal-agent problem?

a) The mayor acts in his own interests rather than the voters' interests.

b) The voters decide the mayor has done a poor job and elect someone else into the office.

c) The mayor gives large bonuses to his staff to encourage better teamwork.

d) The mayor partners with mayors of other cities for better transportation solutions.

e) The voters influence the mayor to act in their collective interests.

In Paris, France, a new provider was able to negotiate with the mayor and get outdoor ad space in exchange for a bicycle rental program. What is one feature of Paris that he credits for helping get this done (something that is absent in many other cities)?

a) budget crisis and new revenues

b) historical context in Europe

c) strong top-down management

d) high gasoline prices

e) history of biking in the city