Employers Can Try to Overcome the Moral-Hazard Problem Involving Their

question 52

Multiple Choice

Employers can try to overcome the moral-hazard problem involving their employees by

• A)paying their employees more often.
• B)paying their employees below-equilibrium wages since the employees will likely shirk some of their responsibilities.
• C)better monitoring their employees' work efforts.
• D)requiring their employees to take a pre-employment work effort test.

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Definitions:

Antitrust Laws

Legislation established to prevent monopolies and promote competition among businesses.

Per Se Violation

A restraint of trade that is so anticompetitive that it is deemed inherently (per se) illegal.

Sherman Act

is a foundational antitrust law in the United States that prohibits monopolies and other practices that restrain trade.

Fix Prices

An illegal agreement between parties to sell a product at a set price, limiting competition and violating antitrust laws.