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If All Issues of Effort,output,and Pay Are Fully Observable and Contactable

Question 18

Multiple Choice

If all issues of effort,output,and pay are fully observable and contactable between an owner and an employee,then:


A) incentive conflicts can be eliminated.
B) incentive conflicts remain intractable.
C) the utility of the employee is unimportant to the outcome.
D) revenues of the firm are independent of employee effort.

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