In the Presence of Asymmetric Information,a Contingent Contract

question 77

Multiple Choice

In the presence of asymmetric information,a contingent contract

• A) achieves production efficiency.
• B) can lead to opportunistic behavior on the part of the agent.
• C) is impossible to write.
• D) will result in the principal earning all of the profit.

---

Definitions:

Cognitive Ability

The intellectual capacity to think, analyze, and solve problems, often measured through IQ tests and specific cognitive assessments.

Cognitive Ability

A measure of an individual's mental capacity for problem-solving, understanding concepts, learning efficiency, and other intellectual abilities.

Readiness

The state of being fully prepared and willing to engage in a particular task, activity, or learning process.

Cognitive Ability

The capacity to perform higher mental processes of reasoning, remembering, understanding, and problem-solving.