If production creates a negative externality, social welfare can be increased through

Firms that have high cost of monitoring, choose their employees much more carefully because

a. They are afraid that the employee would be too productive b. They are more confident that after getting the job, the employee would not shirk c. They are afraid that without screening, the employee would be more likely to shirk d. B & C

Accounting profit is usually smaller than economic profit

a. True b. False Indicate whether the statement is true or false