When a Night Watchman Only Performs Two Walk-Throughs Per Night

question 7

Multiple Choice

When a night watchman only performs two walk-throughs per night when he is being paid to perform five walk-throughs per night, it is an example of

• A)both moral hazard and adverse selection.
• B)neither moral hazard nor adverse selection.
• C)moral hazard, but not adverse selection.
• D)adverse selection, but not moral hazard.

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Definitions:

Negotiating

Negotiating is the process of discussing to reach an agreement or compromise between parties with differing needs, interests, or viewpoints.

Formalizing

The process of establishing official procedures, rules, or structures within an organization or system.

Goal Setting

The process of establishing specific, measurable, achievable, relevant, and time-bound objectives.

Performance

The degree to which an individual, group, or organization achieves its goals and meets expected standards of work.