As the probability of detecting shirking increases, the size of the bond necessary to deter shirking

A) also increases.
B) stays the same.
C) decreases.
D) increases at an exponential rate.

C

Economics

You might also like to view...

How do adverse selection and moral hazard affect the market for insurance?

What will be an ideal response?

Economics

Cans of soup purchased by supermarkets but not sold to individuals in the current period

A) are considered intermediate goods, yet still count in the GDP. B) are considered intermediate goods, thus do not count in the GDP. C) are considered investment goods and do count in the GDP. D) are considered investment goods and thus do not count in the GDP. E) are considered consumption goods but do not yet count in the GDP.

Economics