Suppose a plaintiff hires a lawyer to represent her in a court case.She agrees to pay the lawyer a wage per hour.She knows precisely what the lawyer should do and how long each activity should take,and she can verify that the lawyer has correctly completed each activity.She can terminate the contract at any time.With this contract,
A) the lawyer bears all the risk.
B) the risk is shared by the lawyer and the plaintiff.
C) production efficiency can be achieved.
D) production efficiency is impossible.

Question

Quizplus · Accepted Answer

With this contract, production efficiency can be achieved as both parties have a clear understanding of the expected output and the time required for each activity. The plaintiff's ability to verify the completion of each activity provides accountability for the lawyer, which can lead to greater productivity. The ability to terminate the contract at any time also encourages the lawyer to work efficiently to avoid losing the client. The risk is not solely on the lawyer as the plaintiff is paying for the services and can terminate the contract if they are dissatisfied with the lawyer's performance.

Suppose a Plaintiff Hires a Lawyer to Represent Her in a Court