The temptation of imperfectly-monitored workers to shirk their responsibilities is
A)an example of the moral hazard problem.
B)an example of the adverse selection problem.
C)an example of screening.
D)an example of signaling.

Question

Quizplus · Accepted Answer

The temptation of imperfectly-monitored workers to shirk their responsibilities is an example of the moral hazard problem, which is a situation where one party takes risks because they know that the potential costs or losses will be borne by another party. In this case, workers may shirk their responsibilities because they know that their employer may not be able to monitor them effectively, leading to potential losses for the company.

The Temptation of Imperfectly-Monitored Workers to Shirk Their Responsibilities Is