Refer to Figure 8.2. As the competitive industry, not just the firm in question, moves toward long-run equilibrium, what will the price be?

To maximize profits, firms hire labor as long as

A) each additional hour hired produces more additional output than the real wage rate. B) the total hours hired produces more additional output than the real wage rate. C) each additional hour hired produces more additional output than the nominal wage rate. D) the quantity of labor supplied increases as the real wage rate increases. E) workers continue to supply labor to the firm.

To keep employees from shirking, you can invest in greater monitoring

a. even though monitoring is expensive b. especially when monitoring is efficient c. when employees respond well to incentive contracts d. when incentives solve both moral hazard and adverse selection problems with employees