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Author Question: Moral hazard occurs when contracts are written in such a way that A) the interests of agent and ... (Read 45 times)

09madisonrousseau09

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on: Jul 1, 2018
Moral hazard occurs when contracts are written in such a way that
 
  A) the interests of agent and principal converge.
  B) the interests of agent and principal diverge.
  C) agents will wish to maximize the principal's utility.
  D) production and risk-bearing efficiency are achieved.

Question 2

The outcome of the state of nature effects the payoff to the agent under a
 
  A) fixed-fee contract.
  B) hire contract.
  C) contingent contract.
  D) All of the above.
Microeconomics ¦ Perloff ¦ 8th Edition
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kardosa007

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Reply #1 on: Jul 1, 2018
Answer to Question 1

B

Answer to Question 2

C


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