To keep employees from shirking, invest in greater monitoring
a. when monitoring is expensive relative to its benefits
b. especially when monitoring is not very efficient
c. when employees fail to respond to incentive contracts
d. when incentives solve both moral hazard and adverse selection problems with employees
c
You might also like to view...
An airline can profit by offering standby customers an unsold seat at a substantial discount just before takeoff because
A. additional passengers are needed to balance the load. B. the marginal cost of additional passengers is very small. C. additional passengers add little to fixed costs. D. such passengers add more to profits than do those with reserved seats.
In the short run, if a firm shuts down it avoids its variable cost but not its fixed cost
Indicate whether the statement is true or false
Assume that an increase in Costa Rica's government budget deficit reduced desired national saving by 10 million colon. Assuming Costa Rica is a small open economy, you would expect the government's action to
A) increase the current account balance by exactly 10 million colon. B) increase the current account balance by less than 10 million colon. C) reduce the current account balance by exactly 10 million colon. D) reduce the current account balance by more than 10 million colon.
Paul and David work for the same company and have the same job title, education, work experience, and are equally skilled at what they do. Paul works the night shift and is paid $60,000 a year, while David works a regular day shift and is paid $55,000 a year. Which of the following is the best explanation for why Paul earns more than David? a Paul has more human capital than David. b David has more human capital than Paul. c Paul has received a compensating differential. d Aside from pay, the night shift is more desirable than the day shift.
a. Paul has more human capital than David.
b. David has more human capital than Paul.
c. Paul has received a compensating differential.
d. Aside from pay, the night shift is more desirable than the day shift.