Question

Xavier is an employee who does not work diligently unless constantly supervised and believes that he is underpaid. What economic principle does Xavier illustrate? Xavier is an example of O A. the principal-agent problem O B. marginal returns to work O C. the law of diminishing returns O D . inefficient hiring practices

Answer 1

"D"

Xavier is an example of inefficient hiring practices , This cannot be principle agent problem because in that case the employee and the employer have different objectives. The answer is "D".