A typical reason moral hazard arises in the workplace is:
A. employees do not directly benefit from their effort, only their time spent at work.
B. employees get paid the same, whether they try really hard or not.
C. employees have no incentive to let the employer know how hard they can really work, because that might be expected of them all the time.
D. All of these statements are true.
D. All of these statements are true.
You might also like to view...
By the 2000s, investment banks had become significant participants in the secondary market for mortgages
Indicate whether the statement is true or false
The implicit assumption behind the Economic Recovery Tax Act of 1981, which cut the individual income tax rate by 25% over three years, was that
A. tax rate reductions will decrease supply in the economy and therefore choke off the high rate of inflation that the economy was experiencing. B. the economy was on the positively sloped portion of the Laffer curve. C. tax rate reductions will stimulate demand in the economy and move the economy to full employment. D. the economy was on the negatively sloped portion of the Laffer curve.
Over a business cycle, the quantities of capital, human capital, and entrepreneurial talent
A) change gradually and do not fluctuate much. B) cycle alongside real GDP. C) are completely unpredictable and cannot be forecast. D) cycle more than real GDP. E) are constant and do not change.
In a bakery for a given amount of croissant production, an additional pastry worker produces 100 additional croissants, and one extra mixing machine produces 50 extra croissants. Each pastry worker costs $30 to hire, and a mixing machine costs $10 per unit. The bakery owner should
A. produce fewer croissants. B. hire an additional pastry worker. C. purchase an additional mixing machine and use one less pastry worker. D. hire an additional pastry worker and sell a mixing machine.