When Managers of Firms Are Given Fixed Salaries, Which Are

question 70

Multiple Choice

When managers of firms are given fixed salaries, which are not tied to the firm's profits, they generally put forth less effort than they otherwise would.This is an example of

• A)adverse selection.
• B)moral hazard.
• C)risk aversion.
• D)none of the statements associated with this question are correct.

---

Definitions:

Surgical Interventions

Medical procedures involving incisions with instruments, performed to investigate or treat a pathological condition such as disease or injury.

Medication

Substances used to diagnose, treat, or prevent illness and disease in humans or animals.

Mental Disorder

A health condition characterized by significant dysfunction in an individual's cognition, emotions, or behavior, often disrupting daily life.

ADHD

Attention Deficit Hyperactivity Disorder, a neurodevelopmental disorder characterized by problems with focus, hyperactivity, and impulsiveness.