An fixed wage employee who is able to shirk:
A)will be fired if caught.
B)shows in a subtle way that she is also a residual claimant.
C)proves that the firm is too big for its own good.
D)operates in a world of zero transaction costs.

Question

Quizplus · Accepted Answer

If the fixed wage employee is shirking, it means that she is not putting in her full effort, which can result in lower productivity and profits for the firm. This can negatively impact the residual claimants, who are the owners of the firm and have a stake in its success. Therefore, by shirking, the fixed wage employee is indirectly showing that she is also a residual claimant, and her actions can affect her own and other residual claimants' interests.

An Fixed Wage Employee Who Is Able to Shirk