When new professors are hired,their job performance is monitored closely.If they meet their institution's standards,they will eventually receive tenure.After receiving tenure,professors' job performance is less closely monitored,and they become difficult to fire.What does tenure create
A)adverse selection
B)Condorcet's paradox
C)a screening paradox
D)moral hazard

Question

Quizplus · Accepted Answer

Tenure creates a moral hazard because it reduces the incentives for professors to maintain high job performance once they have job security. They may become complacent and take advantage of their job security, knowing that they cannot be easily fired.

When New Professors Are Hired,their Job Performance Is Monitored Closely