In the presence of asymmetric information, a hire contract A) ...

[Wadzanai]

In the presence of asymmetric information, a hire contract
 
  A) achieves production efficiency.
  B) can lead to opportunistic behavior on the part of the agent.
  C) is impossible to write.
  D) will result in the principal earning all of the profit.

Question 2

In the presence of asymmetric information, a contingent contract
 
  A) achieves production efficiency.
  B) can lead to opportunistic behavior on the part of the agent.
  C) is impossible to write.
  D) will result in the principal earning all of the profit.

[Jordin Calloway]

Answer to Question 1

B

Answer to Question 2

B