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    Exam 20: Contracts and Moral Hazards
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    An Efficient Contract Is an Agreement in Which
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An Efficient Contract Is an Agreement in Which

Question 2

Question 2

Multiple Choice

An efficient contract is an agreement in which


A) neither party can be made better off without harming the other party.
B) both parties agree on its clauses.
C) one party takes all.
D) both parties agree to always do their best.

Correct Answer:

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