employment status of the economy
Cs, Measure the dength and bucath of you house musiciens
aketch acceding to scale
show different soome of your
house on the sketch
.
acturing ?
Answers
Explanation:
Hiring labour is different from buying other goods and services, and the contract between the employer and the employee is incomplete. It does not cover what the employer really cares about, which is how hard and well the employee works.
Incomplete contracts arise when important information, such as the employee’s effort, is asymmetric or non-verifiable.
In economics, employment is modelled as a principal (the employer) interacting with an agent (the employee).
The principal–agent model can be used to study other relationships with incomplete contracts, such as the interaction between a lender and a borrower.
Firms do not pay the lowest wages possible. They set wages so that employees earn economic rents, to motivate them to work effectively, and stay with the firm.
Working together in firms brings mutual gains: profit for owners, and economic rents for managers and employees. But rents also lead to involuntary unemployment in the economy.