Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Assume that in the market there exist two types of workers where the principle cannot distinguish types. The two types only differ with respect to the disutility of effort. The disutility is either e^2 or 2e^2.
The utility function for worker one is
U^1(w,e) = w - e^2
and for worker two
U^2(w,e) = w - 2e^2
both types of workers have reservation utility zero
The probability that the worker is of type 1 is q = 1/2
An interested firm is risk neutral and has profits Π (w,e) = e - w
a) Which is the good high productive worker and which is the low productive worker
b) Derive the optimal contract for the firm if it had perfect info about the workers type. What effort levels are demanded and what wages paid. Calculate the firm's profits of both types were employed
c) Formulate the problem when an adverse problem is present
d) Derive the second best contract and calculate the firm's profits
e) Compare the cases of symmetric and assymetric info
The Free Enterprise: Price System The free market system is where the decision about what is produced is the outcome of millions of separate individual decisions made by cons
What are subsidies? Almost in all market systems, government plays its role to stabilize the price of certain commodities, which are of public interest like medicines and edib
A Period of Transition and Improvement: These few years stand out as the golden years for India's BOP. India had a small current account surplus (0.6 per cent of the GDP on an
what is the theory of second best ? prove the theorem with the help of a diagram ?
Is there any relation between inflation and unemployment? The Phillips Curve was a relationship among unemployment and inflation discovered by Professor A.W. Phillips. He foun
MRP Technique- Sectoral Distribution of Targeted Increase in GDP There are two ways of increasing the GDP: (i) Project and accomplish the growth in various sectors through
Long Run Average Cost (or LAC) -Constant Returns to Scale If the input is doubled, the output will double and average cost is constant at all the levels of output.
Explain the detail central problem of an economy?
Vulnerability in international relations: Dominance, dependence and vulnerability in international relations.A greater volume of Ghana’s exports comes from primary commodities
Normal profit: Normal profit is when total revenue is exactly equal to total cost when the latter includes both explicit costs. It is the type of profit when made by firms in
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd