In a principal-agent problem, if the contract implies that the more risk-averse agent will bear less risk, we can say that this contract exhibits
A) efficiency in risk-bearing.
B) risk sharing is not optimal because the less risk-averse (or risk-neutral) agent should bear none of the risk.
C) risk sharing is not optimal because all risk should be transferred to the most risk-averse agent.
D) risk sharing is not optimal because risk-neutral agents should face no risk.
Question 2
The situation in which one firm can produce the total output of the market at lower cost than several firms is called a
A) natural monopoly.
B) pure monopoly.
C) ruling monopoly.
D) cost monopoly.
Risk for injury
Risk Factors for Cardiovascular Disease
Solution to Physics problem
Physics - Problem Exercise