Problem
1. What is meant by investment in human capital? Use this concept to explain (a) wage differentials and (b) the long-run rise of real wage rates in the United States.
2. What is the principal-agent problem? Have you ever worked in a setting where this problem has arisen? If so, do you think increased monitoring would have eliminated the problem? Why don't firms simply hire more supervisors to eliminate shirking?
3. Do you think exceptionally high pay to CEOs is economically justified? Why or why not?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.