One way to prevent workers from shirking is to A) hire only ...

[geoffrey]

One way to prevent workers from shirking is to
 
  A) hire only workers who are predisposed toward shirking.
  B) hire only workers who are predisposed toward not shirking.
  C) reduce monitoring to zero.
  D) pay workers a fixed fee.

Question 2

Explain why checks on principals might be necessary.
 
  What will be an ideal response?

[kishoreddi]

Answer to Question 1

B

Answer to Question 2

Without checks, the employer (principal) might have the ability of exploiting an employee (agent) by claiming that he/she did not put forth the effort agreed upon, or by falsely reporting information such as profits. Since payments are made after work is completed it potentially puts the employee in a bad bargaining position. An inefficient contract might eliminate/mitigate such behavior.