Richard loses his job at the railroad due to a downturn in general business conditions. He is experiencing

Suppose the probability of an employee being caught shirking, q, is a function of the employer's monitoring, M, such that q = M/100

If workers must put up a $1,000 bond and the gain to each worker from shirking is $100, what is the employer's optimal level of monitoring that is just sufficient to discourage shirking?

Critics of supply-side economics argue that

A. tax cuts do not affect supply, only demand. B. supply-siders exaggerate the effects of tax cuts. C. incentives have no effect on behavior. D. the goals of supply-siders are not supported by most economists.