Answer
a) Landlords are the principals, and the tenants are the agents. The landlords don't know the history of the tenants (as to how the tenants act). The payment of security deposit lowers the chance that the tenant will do something bad (graffiti, punch the walls, etc.) to the apartment.
b) The company is the principal, and the executives are the agents. Asymmetric information is available since the company doesn't always know if the executives are acting in the best interest of the company. Having the stock options available would incentivize the executives to make the best choices possible (and increase the stock price of the company so that the executives make money after purchasing the options).
Work Step by Step
c) The agents are the customers, and the principal are the car insurance companies. Asymmetric information is available since the insurance companies don't know where the customers are parking their cars (on the street, in a garage) or doing risky activities with their cars. Installing antitheft devices would likely reduce the amount of theft regardless of the parked car's location.
