Question from Past Microeconomics Qualifying ExamEdit
Fall 2000 - Section I, Question six, George Mason University
True, False, Uncertain. Determine whether or not each of the following statements are true or false. Explain your reasoning briefly in a paragraph or two. (The explanation is often more important than the answer given). Include a carefully labeled diagram or game matrix if it helps to clarify your answer.
In principal-agent framework where effort is unobservable, the agent exerts ineffciently low effort.