There Is a Monitorless Team (Firm) of 10 Persons

question 102

Multiple Choice

There is a monitorless team (firm) of 10 persons. The 10 persons agree to work together and split the revenue (they earn) equally. In this setting, the cost of shirking to an individual is

• A)higher than it would be if the individual worked alone.
• B)the same as it would be if the individual worked alone.
• C)lower than it would be if the individual worked alone.
• D)necessarily greater than the benefits of shirking.
• E)necessarily less than the benefits of shirking.

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Definitions:

Managers

Individuals responsible for controlling or administering an organization or group of staff.

Marginal Revenue Product

The extra revenue generated by employing one more unit of a factor, such as labor or capital, holding other factors constant.

Variable Factor

An input whose quantity can change depending on the level of production or the scale of operations in the short run.

Production

The process of creating goods or services by combining labor, capital, and resources to meet consumer demands.