One possible solution to an incentive problem arising under unobservable actions is:

A. to be the boss and fire the inefficient worker and send a signal to others.
B. to pay more and make the worker efficient.
C. to sell the agent the right to the total production.
D. to buy the agent's right to his total output.


Answer: C

Economics

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If the marginal product of an input is negative, the total product must also be negative

a. True b. False

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The Bureau of Labor Statistics produces data on unemployment, types of employment, length of the average workweek, and the duration of unemployment

a. True b. False Indicate whether the statement is true or false

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While the slope of the perfectly inelastic supply curve ________, the slope of the perfectly elastic supply curve ________.

A. is zero; approaches infinity B. approaches infinity; approaches infinity C. is zero; is zero D. approaches infinity; is zero

Economics