Which Are Social Costs Associated with the Inability of Shareholders

question 13

Multiple Choice

Which are social costs associated with the inability of shareholders to observe a manager's effort? (You may choose more than one.)

• A) excessive insurance offered.
• B) the manager has to be exposed to risk to induce effort, and risk is costly.
• C) the manager ends up exerting less than first-best effort.
• D) excessive effort induced.

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Definitions:

Growth Hormones

Hormones that stimulate growth, cell reproduction, and cell regeneration in humans and other animals.

Non-REM Sleep

A period of sleep characterized by reduced brain activity and body movement, distinct from REM (Rapid Eye Movement) sleep.

Sleep Apnea

a sleep disorder characterized by pauses in breathing or periods of shallow breathing during sleep.

Insomnia

A disorder characterized by a repeated inability to sleep.