If All Issues of Effort,output,and Pay Are Fully Observable and Contactable

question 18

Multiple Choice

If all issues of effort,output,and pay are fully observable and contactable between an owner and an employee,then:

• A)incentive conflicts can be eliminated.
• B)incentive conflicts remain intractable.
• C)the utility of the employee is unimportant to the outcome.
• D)revenues of the firm are independent of employee effort.

Recognize the legal rights and duties inherent in the principal-agent relationship.

Differentiate between an agent, an independent contractor, and an employee.

Interpret the role and significance of control in determining an employment relationship.

Acknowledge the fiduciary duties and responsibilities of an agent to the principal.

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Definitions:

Associate Sickness

The process by which individuals link certain stimuli or experiences with feeling ill.

Tastes

Preferences or perceptions of flavor experienced through the sense of taste.

Reinforcement

In behavioral psychology, it is a consequence that will strengthen an organism's future behavior whenever that behavior is preceded by a specific antecedent stimulus.

Weakens

To reduce the strength, effectiveness, or power of something or someone.