Moral Hazard Occurs When Contracts Are Written in Such a Way

question 91

Multiple Choice

Moral hazard occurs when contracts are written in such a way that

• A) the interests of agent and principal converge.
• B) the interests of agent and principal diverge.
• C) agents will wish to maximize the principal's utility.
• D) production and risk-bearing efficiency are achieved.

Differentiate between self-leadership and traditional leadership models, focusing on the empowerment of individuals to self-direct and motivate.

Analyze the relationship between job characteristics (autonomy, task identity, task significance) and employee empowerment.

Evaluate the implications of job design on job satisfaction, motivation, and overall workforce stability.

Examine various organizational reward systems and their effectiveness in enhancing employee motivation and performance.

---

Definitions:

Unionization Rights

Legal rights allowing employees to form, join, or assist labor unions for collective bargaining purposes.

Supervisors

Individuals within an organization responsible for overseeing the work of employees and ensuring that tasks are carried out efficiently and effectively.

Taft-Hartley Act

A 1947 federal law that restricted the activities and power of labor unions in the United States.

Illegal

Involves actions or activities that are forbidden by law or not authorized by legal regulations.