An example of moral hazard is
a. A taxi driver paid per mile taking the shortest route
b. a piece-rate garment worker shirking less than a per hour worker
c. an hourly salesman working harder than a commission salesman
d. an author on contract going to as many book signings as one with a percentage royalty rate
b
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So long as the absolute value of the price elasticity of demand for a firm's output is greater than 0, the firm's optimal markup factor will be positive as well
Indicate whether the statement is true or false
Household production is more likely to occur when
a. it requires few specialized resources b. technology makes it more costly than market production c. tax avoidance is undesirable d. less control over the final product is desirable e. the opportunity cost of household production is high