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Author Question: Shirking is most likely to occur when A) the principal monitors the agents extensively. B) ... (Read 15 times)

Jramos095

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Shirking is most likely to occur when
 
  A) the principal monitors the agents extensively.
  B) employees are paid an hourly wage.
  C) a piece rate contract is used.
  D) an assembly line is used for production.

Question 2

According to the Theory of the Second Best, why might market liberalization through elimination of some market distortions, such as particular trade restrictions, lead to social welfare losses?
 
  What will be an ideal response?



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pallen55

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Answer to Question 1

B

Answer to Question 2

Removing some distortions may increase the deadweight losses accrued from other distortions. This may lead to a net loss from reducing trade restrictions.




Jramos095

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Reply 2 on: Jul 1, 2018
Great answer, keep it coming :)


cici

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Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

 

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