In a principal-agent problem, if the contract implies that the more risk-averse agent will bear less risk, we can say that this contract exhibits

A) efficiency in risk-bearing.
B) risk sharing is not optimal because the less risk-averse (or risk-neutral) agent should bear none of the risk.
C) risk sharing is not optimal because all risk should be transferred to the most risk-averse agent.
D) risk sharing is not optimal because risk-neutral agents should face no risk.


A

Economics

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The explanation for why marginal cost is positive and rising in the short run is ________ marginal product of labor in the production process.

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