Which are social costs associated with the inability of shareholders to observe a manager's effort? (You may choose more than one.)
A) excessive insurance offered.
B) the manager has to be exposed to risk to induce effort, and risk is costly.
C) the manager ends up exerting less than first-best effort.
D) excessive effort induced.

Question

Quizplus · Accepted Answer

C

Which Are Social Costs Associated with the Inability of Shareholders