Ricky Goes to Work 8 Hours Per Day, but While

question 46

Multiple Choice

Ricky goes to work 8 hours per day, but while he is at work he spends most of his time visiting internet sites monitoring his fantasy football teams. This is an example of

• A) hidden characteristics.
• B) signalling.
• C) moral hazard and hidden action.
• D) screening.

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Definitions:

Income Items

Generally refer to all the items that contribute to a company's net income, including revenue from sales, services, and other sources.

Reportable Segment

A component of a business that can be separately distinguished for financial reporting purposes, typically based on product line or geographic area.

Operating Segment

A distinct unit within a business that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses related to transactions with other components of the same business.

Identifiable Cash Flows

Cash flows that can be directly linked to a specific project, investment, or business segment.