One Possible Solution to an Incentive Problem Arising Under Unobservable

question 18

Multiple Choice

One possible solution to an incentive problem arising under unobservable actions is:

• A) pay more and make the worker efficient.
• B) be the boss and fire the inefficient worker and send a signal to others.
• C) buy the agent's right to his total output.
• D) sell the agent the right to the total production.

---

Definitions:

IBM-compatible Computers

Personal computers that are compatible with the hardware and software standards established by IBM.

Ctrl and Z

Ctrl and Z is a keyboard shortcut commonly used to undo the last action in many software applications and operating systems.

Continue Statement

A statement that skips the remaining code in the current iteration and moves the control back to the beginning of the loop for the next iteration.

Break Statement

A statement used to exit from the loop immediately, skipping the remaining iterations.