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...
The Bureau of Labor Statistics has taken several steps to reduce the bias in the consumer price index. Which of the following is not one of the steps taken to reduce the bias?
A) updating the market basket every two years, rather than every 10 years B) using statistical methods to reduce the size of the quality bias C) conducting a point-of-purchase survey to track where consumers actually make their purchases D) incorporating substitutions by consumers when prices of specific products rise rapidly
If the poverty line is set too high, the official poverty rate will be
A. negative. B. higher than the true level. C. lower than the true level. D. unaffected by this problem.