Workers often slack off on a job when pay is not tied to output due to the _____ problem.
A)risk-aversion
B)lemon
C)buyer private information
D)principal-agent

Question

Quizplus · Accepted Answer

The principal-agent problem occurs when the interests of the principal (employer) and the agent (worker) are not aligned, leading to the agent having an incentive to shirk or slack off on the job. This can happen when pay is not tied to output, as the agent may not see the benefit in putting in extra effort.

Workers Often Slack Off on a Job When Pay Is