Credible Commitment Problems Are Characterized by a Temporal Dimension (Someone

question 35

Multiple Choice

Credible commitment problems are characterized by a temporal dimension (someone makes a promise today that she does not have an interest in keeping tomorrow) and by the fact that the person making the promise is not the one to benefit from the promise being kept. What are some mechanisms for dealing with credible commitment problems?

• A) enforceable contracts
• B) repeated interactions
• C) institutions that alter the distribution of power
• D) all of these

---

Definitions:

Job J904

A specific project or job, designated by the identifier J904, within a company's job costing system.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual units of production, based on a specific activity base.

Job Cost Sheets

Documents that track the costs associated with a specific job or project.

Machine Hours

A measure of production output or activity based on the cumulative hours that machines are operational.