1)Why is it that the private sector is not expected to supply an efficient amount of a pure public good?

2)In most models of managerial conflict, the owner is the _____ and the manager is the _____.

a. wage earner; stockholder

b. employee; director

c. principal; agent

d. resource; resource owner

1)The private sector relates to the section of a country's economy controlled by individual and private investors and less influenced by the government.

The private sector is not expected to supply an adequate amount of pure public goods since the investors in the sector aim to profit from the investment they make; thus, focusing on giving free products will lead to low or no profit to the investor.

Another reason why the private sector does not offer public goods is that the private sector is expected to pay taxes to the government. Therefore, if they take part in providing public products, the firm may lack funds to pay taxes since it will not profit.

2)

The answer is c. principal; agent.

In economics, we have a concept called the agency problem or the principal-agent problem which refers to a conflict of interest between two parties where one makes decisions on behalf of the other. In a corporation, this concept describes a conflict between the company's management (agent) and stockholders (principal). Based on this theory, managers should maximize the shareholder's wealth which requires a lot of motivation on the part of the management.