Employees shirking on the job is example of moral hazard

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Reference no: EM13838137

State whether the statements are true, false, or uncertain. Why?

1. If there are zero transaction costs, firms prefer to hire employees over independent contractors.

2. Employees shirking on the job is an example of moral hazard.

3. Tournament compensation theory predicts that the pay for a CEO is set at a level equal to the value of his/her productivity on the job.

Reference no: EM13838137

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