________ Describes a Situation in Which an Employee Prefers to Exert

question 87

Multiple Choice

________ describes a situation in which an employee prefers to exert less effort than the effort the owner desires because the employee's effort cannot be accurately monitored and enforced.

• A) Goal congruence
• B) Moral hazard
• C) Performance report
• D) Incentive report

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Definitions:

Property Rights

Legal rights that delineate the ownership and use of property, including rights to use, sell, rent, mortgage, transfer, and destroy the property.

Marginal Costs

The additional cost incurred by producing one more unit of a product or service, crucial for decision-making in economics and business.

Property Rights

The legal rights to possess, use, and dispose of assets, property rights are foundational to free market economies and influence resource allocation and investment.

Marginal Benefits

The additional satisfaction or utility gained from consuming or using one more unit of a good or service.