________ Describes Contexts in Which, Once Risk Is Shared, the Individual

question 164

Multiple Choice

________ describes contexts in which, once risk is shared, the individual fails to make as much effort to avoid harm as when risk was not shared.

• A)Goal congruence
• B)Moral hazard
• C)Management compensation
• D)Incentive compensation
• E)Executive compensation

---

Definitions:

Direct Labor

The cost of wages for workers who are directly involved in producing goods or providing services.

Overhead

Indirect costs not directly associated with the production of goods or services, such as administrative expenses and rent.

Variable Production Costs

Variable production costs are expenses that vary directly with the level of production, such as raw materials and direct labor costs.

Fixed Costs

Costs that do not vary with the volume of production or sales, such as rent, salaries, and insurance expenses.