Refer to the production function. The total product at 4 units ...

[xclash]

Refer to the production function. The total product at 4 units equals ________ units.
 
  Fill in the blank(s) with correct word

Question 2

Production inefficiency is more likely to occur when the principal has more information about work performance than the agent does.
 
  Indicate whether the statement is true or false

[isabelt_18]

Answer to Question 1

Substituting 4 for X, we get Y= 10 (4 ) + 20 (4 )2 - (4 )3

we obtain Y = 40 + 320 - 64
= 360 - 64
= 296 units

Answer to Question 2

False. It is when the agent has more information that production inefficiency is more likely to occur. The agent is able to shirk without being detected by the principal.