CHAPTER 14QUESTION 1To resolve moral hazard, it is necessary that performance incentives align the marginal benefit of effort of the better-informed party to the marginal benefit of the less-informed party ___________
QUESTION 2A South Korean investor in the North Korean tourist industry set up a floating hotel. What is the advantage of a floating hotel over one built on land?
QUESTION 3Which of the following would affect the distribution of ownership?(A)horizontal integration(B)vertical integration(C)both of the above
QUESTION 4The architecture of an organization includes ______
QUESTION 5For a party subject to moral hazard with respect to multiple responsibilities, strong performance incentives for one responsibility may _______
QUESTION 6The owner of an asset has the rights to ____