In the presence of asymmetric information, a hire contract
A) achieves production efficiency.
B) can lead to opportunistic behavior on the part of the agent.
C) is impossible to write.
D) will result in the principal earning all of the profit.
B
Economics
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Using Scenario 2 suppose Bill has eliminated one of the answers but is unsure of which of the remaining four answers are correct. Determine whether it is rational for Bill to guess
What will be an ideal response?
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